Money refund 'not enough'

Political reaction: Opposition politicians said yesterday that the refund of money to overcharged AIB customers was not enough and demanded a change in the culture of banking in Ireland.

Fine Gael's finance spokesman Mr Richard Bruton said the tone of AIB's response "smacks of complacency and a failure to understand the level of public frustration that needs to be addressed. The AIB statement is 1,800 words long, but the word 'regret' appears only once, in the final paragraph."

He said that while the IFRSA report bluntly presents "failures" on the part of AIB, the bank's statement talks of "errors and oversights and presents itself as going way beyond its obligations in paying back to customers charges for which it had no sanction". The issue of responsibility was not dealt with at all by AIB, he said.

He said AIB presented itself as a bank with a strong culture and "glosses over what is now a long series of episodes of failure.The fact is that ordinary consumers and compliant tax-payers have taken a significant hit as a result of activities in AIB and indeed in the wider banking system. There needs to be a serious mindset change within the banking sector."

He said the public would be left with a sense of grievance that no penalty has had to be paid by the bank beyond returning what was wrongly collected. "The regulatory system has been found seriously wanting."

Labour's finance spokeswoman, Ms Joan Burton, said the IFSRA and AIB reports were "a shocking indictment of banking malpractice". She said she welcomed the announcement that AIB is to refund €34.2 million to overcharged customers. However, "the single biggest question which remains unanswered today is why these practices went on for so long within AIB and why nobody seemed to do anything about it. It is a comprehensive answer to that question which will go some way towards restoring confidence in AIB and the Irish banking sector as a whole," she said.

The Green Party's enterprise spokesman, Mr Eamon Ryan, welcomed the refund of the money but called for a change of culture at the bank. "AIB management seems to have put quarterly profit targets ahead of the needs of their customers," he said.

"Banking more than any other business has to be based on trust and even the smallest breach of rules and procedures is unacceptable. The fact that the investigators were able to uncover 24 other cases of overcharging while investigating the original breach is remarkable." He said the fact that the higher rates charged by AIB were in line with those charged by their competitors points to a lack of competition.