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TDS HAVE URGED the Central Bank to closely watch the behaviour of banks to ensure they do not pass on fines for their regulatory breaches to their customers.
This week Permanent TSB was handed a €21 million fine for breaches that impacted on more than 2,000 of its customers as part of the wider tracker mortgage scandal. It is expected that other lenders responsible for this overcharging of customers will also face fines from the regulator.
Fianna Fáil TD and chair of the Oireachtas Finance Committee John McGuinness said the fines should “come off the bottom line”.
This should be affecting directors of the bank and the Central Bank should make sure that happens and that taxpayers and customers of the banks don’t end up having to pay in increased charges.
He said charges brought in by banks in the run up to fines and any subsequent increased charges for customers “need to be challenged by the Central Bank”.
“The banks can anticipate these fines and we have already seen they try every single day to get around the regulatory system.”
TheJournal.ie asked Permanent TSB if the bank wanted to offer reassurance to customers that they would not end up having to cover the cost of the €21 million fine through higher loan costs and fees.
A spokesperson said the bank “won’t be making any further comment at this time”.
Following confirmation of the fine, PTSB’s chief executive Jeremy Masding had apologised for the distress caused. He said “building on the lessons learnt from this issue, Permanent TSB has invested heavily in enhancing the organisation’s risk management and control environment”.
Just this week it was reported that the bank will increase the fixed monthly payment for its Explore current account by 50% this summer. This will make it more difficult for the bank’s customers to qualify for free banking.
‘Individuals made decisions’
McGuinness said the fine was just “one piece” of the action being taken in response to the scandal. He said the Central Bank is still looking at whether individuals in the banks who overcharged their customers should also be financially sanctioned.
In evidence given to the Finance Committee, executives for the banks have blamed the scandal on systems failures, rather than deliberate decision-making, but McGuinness asked “who believes that?”.
“The fact is that they all made the same mistake at the same time with the same results and people are not foolish, they know what happened here,” he said.
Sinn Féin’s finance spokesperson Pearse Doherty said that while a large fine is “a blow” for a financial institution, “the only real deterrent will individual accountability”.
“There will be a real test for the Central Bank here. The reality is that a fine, while it is a deterrent, it will end up on the shoulders of customers.
It wasn’t a system that overcharged those 2,000 customers, it wasn’t systems that took homes from people, it wasn’t systems that told customers they were wrong when they were right. It was individuals – senior managers – who made decisions.
Doherty said Permanent TSB, and other banks, should act ‘customer-centred’ when dealing with court challenges from customers in relation to the tracker mortgage scandal.
“There were some customers settling out of court this week and even though we’ve written to them Permanent TSB hasn’t given any guarantee that it will look at other files similar to those cases to see if they can also be settled,” he said.
“If they were customer-centred, they would do that. Not everyone has the financial ability to take them to the courts. The banks have an army of lawyers facing individuals who are already financially strained as a result of the actions of the banks.”
PTSB has admitted in full to 42 separate regulatory breaches of the Code of Practice for Credit Institutions 2001 and the Consumer Protection Codes 2006 and 2012.
The Central Bank’s Director of Enforcement and Anti-Money Laundering, Seána Cunningham, said that the investigation into PTSB found that they had “failed to put their customers first, with distressing and, in some instances, devastating consequences”.
PTSB failed in their obligations to do the right thing by their customers. In doing so, they broke the trust of their customers and damaged the public’s confidence in PTSB.
“At a minimum, customers should be provided with clear and timely information and warnings about their mortgage, the highest levels of customer service and a commitment from their lender to put things right promptly and fairly should they go wrong.”
Cunningham warned that where firms fail to protect their customers’ best interests, the Central Bank’s response will be “robust and the consequences will be serious”.
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How interesting. They sent me a letter this week informing me my current account quarterly fees would be increasing… I’m SURE it’s just a coincidence…
@Anne Kyle: that’s an absolute disgrace
It’s so brazen like.
@Anne Kyle: its a case of, get the increase in before anybody can do anything about it.
@Anne Kyle: I’m going to move my account and my wife’s account to KBC who still offer free banking.. No way I’m paying bank charges when they offer so little in the way of interest on savings
@Anne Kyle: switch banks?
@Anne Kyle: Well said Anne…They got there first .
This all happened under FF watch and people keep voting them in its no wonder this state is being driven into the ground and it’s the voters to blame.
@Finbarr Barry: KBC are up to their necks in tracker fraud also.
@Robert Phelan: I think it was actually Labour and FG who bailed them out. Remember “Frankfurt’s Way or Labour’s Way” and Gilmore’s election promise that no way would Labour bail out the banks. He got elected, Labour took office with FG and guess what?
@GrumpyAulFella: it was FF that brought the Troika into this state. it was FF that drove this state off a cliff and creating 200billion debt in the process.fg and labor got into to power on the promise of burning the junior bondholders which was nothing short of a complete sellout of our state and our people.https://commodity.com/debt-clock/ireland/ this clock is a reminder of FF Fg and liebour and how they destroyed this state and it should never be forgotten because this is our reality.the next recession will send us back to the stone age. Ireland is literally living on borrowed time.MSM is failing to remind us of this fact that FF with the greens along with Fg and liebour destroyed this state people should never forget that so as we never make the same mistakes again.but here we are voting those parasitic party’s parties back in again and who’s fault is it.MSM are mainly to blame especially RTE…RTE lies and propaganda!!!and the gold fish memory Irish.
@Robert Phelan: and what alternative to FF, FG, Labour and the Greens would you have? You’re running out of parties there and we have about 10 independents propping up this govt.
@Sean Murphy: yeah thinking about switching to N26.
@Anne Kyle: but now we know who you bank with. Be safe with your data online is all I am saying.
@GrumpyAulFella: Onwards and forwards for me it would be… Direct Democracy Ireland I think we need something brand new and these people are offering it.I would also give SF and the greens together ago at office c how they get on anything bar the sameo sameo FF Fg lab.Would you really want ffg at the steering wheel when the next recession comes Christ what else can they sell off.Who will bail us out the next time 200billon in debt we are fooked grumpyaulfella and u know it.Now can you tell me who would give us a loan to bail us out a second time and what we would have left to sell for this loan in assets since everything valuable is all ready gone.?it’s a good question to ask
My service fee went up last week from €4 to €6 pm. I’m with PTSB. They already passed the fine on before the verdict.
@TheTrustedChalice: Can you point us all to an Irish bank that has no fees?
@David Corrigan: why should a bank provide you with a fee free service ? Switch your bank if you’re not happy. But don’t expect prices/fees to stay the same forever.
https://www.switchyourbank.ie/
It’s a simple process.
@TheTrustedChalice: because believe it or not while thy have out money it’s an asset to them and the liability as hs been shown is all on us.
@TheTrustedChalice: I don’t use state banks thanks. I wouldn’t trust them to mind my kitten.
@David Corrigan: they have to implement fees these days due to the negative interest environment the eurozone’s dysfunctional economy demand. You should rest easy in the fact that the fees you’re paying are effectively subsidising the less fortunate in society, like investment bankers and hedge fund managers.
@Dave O’Keeffe: how is holding cash deposits an asset when the banks that hold the money have to pay credit interest on their deposits to the ECB?
@TheTrustedChalice: don’t think anyone should take advice from a faceless troll account
@David Corrigan: and that’s your choice David. Thank God for the free market.
@winston smith: so you’re saying thryre operating at a loss? Hint: they can’t give money out unless they have some in.
@winston smith: you asked how holding deposits was an asset, I told you, you cried.
@TheTrustedChalice: because they are making millions as a result of using them to deal with our money
@tottkingham: doesn’t the state, us the taxpayer, have a 75% stake in PTSB? Surely therefore the state, us, as a majority stakeholder has a say on levying increased bank fees on, us?
@TheTrustedChalice: can you show me an honest bank in this kip? They’re all the same doesn’t matter who you’re with
@Dave O’Keeffe: you are completely wrong I am afraid. It works the opposite way in banking. Our money that we put into the bank is actually liability for the bank (they owe you your deposits and credit balances). The main asset for any bank are loans (you owe them the monies that you borrowed).
@Luke Windak: except they need our money so they can give those loans.
@TheTrustedChalice: Who said I was moaning? Stating a fact, Muppet.
Regulation in this country is a complete joke. The banks just laugh at governance. Like everything here, the consumer gets shafted yet again
Banks are the scared cows of the country. The government will do nothing to prevent account holders of the bank being fleeced to pay the fine.
The bankers should have been jailed for the deliberate fraud.
@TheTrustedChalice: Just curious as to why you feel so passionate about defending the banks? Are you an employee bearing the brunt of people’s anger every day? If so I can understand but if not why the petty name calling?
@Dave Doyle:
FG are afraid of the banks here. You might remember Enda Kenny rolling up his sleeves to give them a good talking to about their profiteering interest rates. They laughed him out of the building.
@Coco86: I just want people to be factual. There was no fraud. It’s like saying that the smear test scandal was deliberate. It wasn’t, it was negligent, absolutely awful but not done on purpose.
Nor was the overcharging.
I hope that has answered you question.
@TheTrustedChalice: explain it to him rather then name call so oh wise one.
@Seaniecp: I’ve just explained the key difference between a act of fraud and an act of negligence.
If you want the finer details you will have to do what I had to, and educate yourself on what happened. Info is freely available.
@TheTrustedChalice: No you have compared it to the smear test scandal. And said how something can be deliberate or negligent. Explain how you know this particular scandal (tracker mortgage) to be either deliberate or negligent and how you know please. He wasn’t commenting on the definition of fraud. I wouldn’t usually demand this but if your going to call someone a dummy for not knowing you should back it up with your knowledge.
@TheTrustedChalice: you have explained nothing. You merely stated an outright denial, negligence, within a compliance setting, IS a form of fraud. As well you know.
@TheTrustedChalice: It’s not negligent to refuse to honor contractual terms. It’s fraud. Negligence is more like there was no hand on the wheel when there should have been. There was a hand on the wheel here. Clearly deliberate and clearly fraud. The only thing not proven is whether the banks acted together on this.
@TheTrustedChalice: deliberate and systemic breach of contract denied even when proven. It was fraud in many cases as a matter of fact.
@Sean: the dogs on the street know that the banks colluded. Lightning can strike the same place once or even twice, but the chances of it all striking at the same time and in the exact same way is literally not possible. The only things missing in hard confirmation, and knowing our banking and political systems this has been long since been buried.
@TheTrustedChalice: if one bank does it then perhaps it can be called an accident, when six are involved it’s policy and it cannot be defended.
@TheTrustedChalice: No fraud you say ? Hang on a minute, deliberately taking money from another without permission by means of dishonesty and then treating it like it’s yours is just about the text book definition of fraud.
What you’re saying is akin to the importation of cocaine is not illegal if Customs or Gardai don’t catch you.
TSB are already hiking fees on existing accounts. What a coincidence.?
Banks are the scûm of the earth
@Scorpionvenomm: dont use them then
Maybe it’s already too late
@Thomas Meaney: why are these people not in jail .took home from people illigally
People were suicidal and we impose a fine on their customers. Meanwhile Varadkar want to jail people getting 200 a week on welfare. Great society we live in.
@Daithi Ó Raghallaigh: cop on will ya… It’s good old Ireland…what do you actually expect? Back away from reality you live in Ireland.
@Daithi Ó Raghallaigh: I agree, every single time someone makes a mistake in work we should jail them
But only if they actually work and pay tax. If your unemployed, claiming welfare and committing crime, your immune
Just got a letter from PTSB stating an increase in my current account fee. They have the public over the barrel!
@Darren Mc Cann: close your account
@Darren Mc Cann: Switch banks or use revolute for most of your transactions, they’re a lot cheaper than a regular bank.
This is criminals, banks acted together as a cartel to go after fixed rates. The evicted people illigally and sold their homes and our Garda need the nod from Government to initiate a fraud investigation. We still a little banana republic.
@TheTrustedChalice: right these banks all woke up one day and decided to collectively independently go after trackers. Pigs fly too I suppose.
@TheTrustedChalice: and there is no investigation for fraud. We are keeping up.
@Daithi Ó Raghallaigh: there’s a separate enforcement agency for that, it’s not the Gardai.
Anything else just being made up on the spot?
@TheTrustedChalice: p
@TheTrustedChalice: lots of evidence.
Scandals in Irish banks have been going on for over 30 years. Nothing has or will change.
Always the way. Paddy pays one way or the other .. 100 years like so under FFG ..
Now thats a joke in itself, expecting the central bank to make sure the bank doesn’t rip customers off to pay for the tracker mortgage mess……..I’d have more faith with a dead corpse ensuring this than the central bank, given its track record of putting customers ahead of banking greed
Ohh it’s good to have a good laugh first thing in the morning
@Duncan Paul: you need to get up earlier and not waste half the day in bed.
@dstaffx: but if he dosen’t go to bed early hes not wasting anything….some of us are night owls!!!
@Brian Kelleher: sun light is good for you
Yea right !
See this evidence in government buildings. And nothing will happen. Central bank culpable
http://bit.ly/2YQJG7F
“TDs HAVE URGED the Central Bank”
“Right lads we’ve done our bit” says Joe SoapTD.
Krasy Krap. I
Banks are like the government s still learning lessons lessons they will never learn coz their fines are a drop in the ocean and just like the government those responsible will never be fired but will enjoy their pension package
People are very naive if they are under the impression that this fine wont be passed on to customers ,its hardly going to come out of government coffers or bonuses. It’s also a particularly low figure!and how was it calculated ?.
Serious question,how was a bank expected to pay for fines, if not from income?
Fees were always being passed on, in same way losses incurred on cheap trackers rates are paid by higher rates to new mortgages. Money to meet these costs must come from somewhere and pretending it won’t be customers is sticking head in sand.
Any fines imposed for passing on of these fines to customers will also be paid by customers
@ginger tomcat: serious suggestion. How about this? All monies set aside for the payment of bonuses should be the first well pool that any fine payments are drawn from.
Fines result from management misbehaviors afterall.
@ginger tomcat: it should come out of their “bottom line” ie. Profits.
21m is pocket change to PTSB .
This bank alone increased their lending share by 40%, leading to profits of roughly 1.5billion.
So explain to me how when fraud is commuted by banks for example, especially in this case that it’s fair to say it’s normal for customers to take the hit.
A major problem especially in finance, is that very mentality, that these fraudsters will walk away with the profit + bonuses while customers or tax payers (society as a whole) are left not just paying financially for the damages caused but in many cases with their lives.
Time to stop normalising corporate greed & start normalising the behaviour of public good over bottom line profits.
@ginger tomcat: from profit
“TDs HAVE URGED the Central Bank”
“Right lads we’ve done our bit” says Joe SoapTD.
Krasy Krap.
@Noel Ryan: True, but have they instructed Revenue to ensure the fine is not tax deductible as a business expense. Taxpayer then paying 40% or so of the fine or as they don’t pay tax at the moment, the date they start is delayed.
Ultimately whether a customer or a taxpayer we will pay the bill.
Bloody politicians haven’t the cojones to do anything that involves real penalties on the financial sector.
Aib have done it already.
Banks basically never put their customers first. The bottom line is profit and they don’t care how they get it.
There is little value to the bank in holding money for regular consumers given current interest rates. Hence why they primarily only can make money via bank charges for services used unlike the past.
Seems fair TBH. You pay for the services you use.
Expect sharp increases in bank charges unless you keep €5k in your account at all times.
We honestly have the most useless politicians ever. They are over paid and over pensioned and couldn’t give a toss about the time wools they represent.
Isn’t that how a business works? Money comes from somewhere. I suppose the shareholder can take a hit – oh no wait that’s the taxpayer!
Ptsb is a state bank and the minister for finance is the nominal shareholder on behalf of the citizen/taxpayer. It’s the taxpayer’s responsibility to cough up. As ever!
@Kieran Feely: well we get the profits as well
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha. Course they will
They already did
Sorry but where will the money for the fines come from????
Last week, the people who look after the Banks were voted back in. A lot of the electorate here sure are ignorant dumb asses.
do we get to have a smoke after the bank has shafted us?!!!!
@Brian Kelleher: not even a kiss!!!
People vote FF FG again and again and then wonder why sh.. happens, stupid is as stupid does
@Bertie O’Riordan: alternatives? Seriously.
Greens, pd and labour towed the line when they went in and all got hammered next time. SF? Yeah right, maybe when they actually enter grown up politics for real. Pbp? Daly and the fraudster?
Forget saying the name the names of the people who has done all this
They already have.. Bloody disgusting..
Apparently the Journal won’t let me swear about PTSB which is mental because they are so poor that nobody could find F bombs about them offensive.
Tail swinging the dog lads wake up
Move your accounts away from traditional bricks and mortar banks to the like of N26, Revolut or Monzo(UK address required), they are far ahead of traditional banks imo.
Most corrupt bank in Ireland and that is saying something…
These people should be compensated for the banks policies surely
have your say