Central Bank to look into Ulster Bank fixed deals

Some mortgage switches involved ‘suspected breaches’ of Consumer Protection Code 2006

The suspected breach emerged  in the first quarter results of parent company Royal Bank of Scotland. Photograph: Warren Allott/AFP/Getty Images

The suspected breach emerged in the first quarter results of parent company Royal Bank of Scotland. Photograph: Warren Allott/AFP/Getty Images

 

The Central Bank of Ireland has launched an investigation against Ulster Bank in relation to customers who switched from tracker mortgages to fixed rates between August 4th, 2006, and June 30th, 2008. This involves “suspected breaches” of the Consumer Protection Code 2006 by Ulster Bank and emerged on Friday in the first quarter results of parent company Royal Bank of Scotland.

This investigation is part of its administrative sanctions procedure and could lead to a fine of up to €5 million for the bank, although this sum would be reduced if Ulster Bank co-operates and agrees a settlement with the regulator.

Accounts involved

In a statement, the Central Bank said it “cannot provide any further comment in respect of this ongoing enforcement investigation”.

This move against Ulster Bank comes nine months after the Central Bank forced Permanent TSB to put in place a redress scheme for 1,372 customers in relation to tracker mortgages. In December, the Central Bank directed all lenders to review the treatment of customers who had been sold mortgages with a tracker interest rate or with a tracker entitlement.

Ulster Bank has set aside €5 million to cover the costs of this review.