38 wrong accounts found in IP trawl

Irish Permanent has found 38 mortgage accounts where incorrect interest rates were charged and will be adjusting the accounts and informing the customers, a spokesman said yesterday.

The average amount of overcharging found was about £500, with the largest being about £1,200, the spokesman said. Interest will be paid and the customers will be informed within a week.

In the wake of a court action last week in which it emerged that a couple in Tallaght, Dublin, were overcharged between 1996 and May of this year, Irish Permanent initiated a review which led to about 16,000 accounts being checked. The company checked all accounts where a change involving a fixed rate occurred during the past five years and where the possibility of a mistaken rate being applied arose. The 38 accounts where mistakes were discovered were among approximately 3,500 cases where the accounts were switched from endowment mortgages to annuity mortgages, in many cases because of the accounts falling into arrears.

In such cases a manual adjustment was part of the process of where a new rate should be assigned, and it was at this point that mistakes were made. The company has now introduced new measures to guard against such mistakes.

In the Circuit Civil Court last week Judge Raymond Groarke dismissed an application by Irish Permanent for possession of the home of Mr Philip and Mrs Marie Eustace, St Maelruan's Park, Tallaght.

He said the proceedings had been instituted for sums of money which were in doubt, and he praised the couple for having checked the interest charged to them by the loan company.

The couple's solicitors found they were charged a fixed rate of 9.5 per cent when they should have been charged a variable rate during a period when rates varied between 6.75 per cent to 7.5 per cent. Judge Groarke awarded costs against the company.