Tens of thousands of former KBC Bank Ireland mortgage borrowers whose loans were sold to Bank of Ireland have been affected by an error that occurred after the transfers in February, which has resulted in the lender not filing monthly loan performance updates to the Central Credit Register (CCR).
The data gaps since February may affect borrowers’ ability to secure loans or credit elsewhere. However, the bank said that this is unlikely.
Bank of Ireland has told its new customers in letters issued recently that the problem occurred on the point of transfer, where the “start date” of the loan was incorrectly put into its systems. A spokesman for the bank said that it related to some 35,000 mortgage accounts, or about half of the KBC loans it acquired.
“As we were aware of this error, we did not submit the mortgage details to the CCR. This was to prevent incorrect credit information being reflected on your credit report,” the bank said in the letters. “As a result, we have not submitted information relating to your mortgage loan to the CCR for February or March 2023. We will continue to withhold monthly reporting until the error is fixed.”
Bank of Ireland told borrowers that if they believe the reporting gap may have affected a lender’s decision to provide fresh credit, they can contact the lender to inform them that the information on the CCR is not up to date and that the bank is in the process of correcting this.
“You can provide this letter as proof of our error and our intention to correct this gap as quickly as we can,” it said, adding that it apologised for the error.
Lenders operating in the State covering everything from hire purchase agreements to mortgages are obliged to submit payment information every month on loans of €500 or more to the CCR operated by the Central Bank.
The Bank of Ireland spokesman said the company had informed other lenders of the issue. “To date, we’ve had no confirmation of a loan application being impacted, but if any customer has a specific query, they can contact our team and we will support,” he said.
“We are updating the records as a priority and will write to customers again when it is resolved, which is expected in the next few weeks.”
The loan deal follows Belgian financial services giant KBC Group’s decision two years ago to exit the Irish market, weeks after the only other non-Irish-owned retail bank in the Republic, Ulster Bank, revealed that it was winding down.
Bank of Ireland acquired €7.6 billion of performing mortgages, €100 million of mainly performing personal and consumer loans, €200 million of non-performing mortgages and €1.8 billion of deposits as part of the deal.
News of the data error comes a year after Bank of Ireland was fined €463,000 by the Data Protection Commission (DPC) after an investigation found 47,000 customer accounts were accidentally altered in such a way it could have damaged their credit ratings and prevented them from getting loans.
Between November 2018 and June 2019, the DPC received 22 breach notifications from Bank of Ireland in relation to incorrect data the bank was sending to the CCR. In total, 19 of these incidents met the definition of “personal data breach”.
In some cases, incorrect data was added to a customer’s file to indicate they were “in financial distress” when they were not. It took the bank over a year and a half from the date of first becoming aware of the breach to provide the DPC with a final update on the number of individuals affected, the regulator said at the time of the fine. Some 27,400 mortgage accounts were affected by the error.