PERMANENT TSB FACES having to make a massive pay-out to some mortgage customers, over failures to warn holders of fixed mortgages of the consequences of breaking the terms of their contracts.
The lender has withdrawn appeals to the Supreme Court relating to four customers who broke the terms of their mortgages early, and subsequently wanted to move to tracker rates.
The deals the mortgage holders had been on included a provision that they could move to a tracker, once a fixed rate term had expired.
However, as they had chosen to break with the fixed rate agreement early, the bank didn’t let them to revert to a tracker.
The customers’ complaints to the Financial Services Ombudsman were upheld — and, in turn, that ruling was also upheld by the High Court in 2012.
The lender had been planning to take the case to the highest court in the land — but has now confirmed the appeals have been withdrawn.
Not enough info
The FSO had found that the bank had erred by not providing the customers with all possible information about the consequences at the time they decided to break from the fixed term.
Permanent TSB now says it wishes to review around 80 similar complaints lodged with the FSO, which the financial watchdog had decided not to issue a decision on pending the outcome of the Supreme Court case.
A spokesman for Permanent TSB said in a statement that the bank was also reviewing how it had dealt with all cases of customers in similar positions.
The review “will be concluded and any affected customers will be advised in writing if they are to receive redress as soon as possible,” the statement said.
A Reuters report published last night estimates that the lender may have to compensate as many as 2,000 customers.
This issue is also subject to an ongoing enforcement investigation by the Central Bank.
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