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Banks may have colluded in Irish tracker scandal

  • 05/04/2017
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Banks may have colluded in Irish tracker scandal
The Irish Central Bank has contacted the Gardai, after admitting that it believes the country's banks may have colluded with each other in order to overcharge thousands of borrowers on tracker mortgages.

Reports suggest that as many as 22,000 borrowers have been affected by the scandal, either by being denied a tracker mortgage or being moved off them incorrectly, following the financial crisis.

Philip Lane, governor of the Central Bank, said there was a “systemic” issue, with 15 banks ordered to examine their back books.

Lane said: “I’m not going to rule out, until these examinations are concluded, the hypothesis of collusion but there was an economic imperative here for many of these banks. Essentially, I think what was happening was that they were trying to, [during] a period of financial stress, save money by charging customers, where they could, a higher, more expensive rate.”

Banks have already started paying compensation to borrowers over the affair – according to the Central Bank, around €78m (about £67m) has been paid out in redress to 2,600 victims, with another 7,000 affected customer accounts identified.

One lender, Springboard, has been fined €4.5m (£3.85m) for its behaviour, on top of the €5.8m (£4.96m) it has already paid out in compensation.

Lane warned further fines may be on the way. He said: “We may also commence other investigations, as appropriate, into other lenders and persons concerned in the management of such entities where there is evidence of non-compliance with regulatory requirements.

“In this regard, enforcement activity will be influenced by the outcome of the reviews currently being conducted as part of the tracker examination.”

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