AIB apologises for overcharging tracker mortgage customers

AIB has apologised for failing to ensure that all of its tracker mortgage customers were on the correct interest rate and has indicated that it will compensate the affected customers for the error.

This follows an internal review of its tracker mortgage book, which was ordered by the Central Bank of Ireland last December.

"Our review has found, that in some instances, we were not sufficiently clear with customers or we failed to honour contractual commitments," AIB chief executive Bernard Byrne said in his review of the bank's half-year financial results.

“On behalf of the bank, I apologise to customers for these failures which should not have happened and which we now intend to put right.”

Some 3,000 AIB loans accounts are believed to be affected by this error although the bank has not put a figure on this.

The Irish Times had revealed in advance of AIB's results release that the bank would begin writing to affected customers this week to inform them that they had been overcharged on their tracker rates.

AIB said it would shortly “commence engagement” with individual customers affected by this review, adding that the overall process would take some time to conclude.

“We have maintained the provisions (€190 million) recognised in respect of this matter in the 2015 year end accounts,” it added.

AIB said it incurred costs of €11 million (direct costs of the project and redress for certain customers) in the first half of this year.

It released the details of its mortgage tracker review as part of its half-year results, which showed it made a pre-tax profit of €1 billion in the first six months of this year.

In terms of its tracker mortgages, AIB said it had combined two reviews into a single programme, to ensure it delivers a “fair outcome” for customers.

“We have completed a significant amount of work to date and continue to work through this process as set out in the CBI (Central Bank) framework.”