Mortgage Lender Fined €4.5m By Central Bank

Springboard Mortgages Limited, owned by Permanent TSB, has been fined by Central Bank for failing to provide customers with the correct interest rates.

The mortgage provider, owned by was fined €4.5 million, with the bank also paying €5.8 million to affected customers.

An investigation by Central Bank found the firm applied the wrong interest rates for 222 mortgage accounts from August 2008 – July 2015, resulting in customers making higher mortgage repayments than required.

In addition, Springboard Mortgages failed to:

• Act with due skill, care and diligence and in the best interest of its customers

• Effectively employ adequate and/or appropriate resources and procedures

• Have adequate systems and controls in place

The firm's failures also caused some impacted customers going into mortgage arrears, with some being subjected to legal proceedings.

Derville Rowland, the Central Bank's Director of Enforcement, said: "Over a seven year period the Firm failed to apply the correct interest rates to 222 mortgage accounts. The consequences for impacted customers were serious and totally unacceptable. All 222 customers paid more than required, some fell into mortgage arrears and some were subjected to legal proceedings.

The Central Bank required the Firm to cease applying incorrect interest rates to customers' mortgage accounts and to implement a major customer focused redress and compensation programme.

"The imposition of the fine and reprimand, in addition to the redress and compensation programme, demonstrates the Central Bank's determination to take all necessary action in order to protect customers' best interests, and serves as a clear and timely warning to all regulated firms of their obligations to customers."

Sinn Féin Finance Spokesperson, Pearse Doherty TD, said with at least 8,500 cases of families being wrongly moved off tracker mortgages, the country is now "looking at an industry wide theft of massive proportions".

"Tt is now five years since the Financial Services Ombudsman first ruled in favour of mortgage holders' complaints about being moved off trackers," he said.

"It is over four years since the High Court backed up that ruling.

"Now five years on, thousands are still waiting for redress. The Ombudsman and Courts stood up for the people's rights but the Central Bank is still moving at snail's pace. Only last year, under huge political pressure, did they finally announce an industry wide trawl to identify the extent of the problem.

"For the last couple of weeks, the Finance Committee has heard bank after bank spinning excuses and trying to justify the thousands of trackers cases as being down to 'system failures' or other excuses. They have been able to get away with this because they know the Central Bank has, so far, not been up to the task of protecting consumers.

"I will be quizzing more banks and the Minister over this issue in the coming days. I will not be accepting any excuses from the banks or from the Central Bank. The banks have been caught red-handed; the question is why the Central Bank let them away with it for so long even after the scandal emerged."

(LM/CD)