Bank of Ireland ‘blocked’ staff from reverting to tracker mortgages

Financial consultant claims employees were afraid of speaking out in case they lost their jobs

Financial consultant Padraic Kissane said he had been investigating the issue for more than two years

Financial consultant Padraic Kissane said he had been investigating the issue for more than two years


As many as 2,000 staff at Bank of Ireland may have been wrongly blocked from returning to tracker mortgage rates by their employer after the property crash and have paid tens of thousands of euro more in repayments as a result, a leading financial consultant has claimed.

Padraic Kissane, who has run a long campaign aimed at seeking redress for thousands of customers of multiple banks wrongly moved from low interest but loss-making tracker rates after the property market collapsed in 2007, said Bank of Ireland staff have been afraid of speaking out in case they lose they jobs or are otherwise targeted by their employer.

“All these staff were assured they were going to revert to their tracker mortgages once their fixed term ended but when the crash came that did not happen,” Mr Kissane said.

“I would say that because of the roles these people play and because they are staff, they have been afraid to do anything. But these are customers of the bank as well as employees - and that can be forgotten.”

In documentation sent to mortgage holding staff in 2008 and seen by The Irish Times, the bank initially committed to returning those of fixed rates to the tracker once the fixed rate period ended.

However in a subsequent letter, the bank reversed this commitment.

“A communication issued on October 9th indicating that the tracker mortgage would be available on rollover,” the second letter said.

“This preceded our final assessment of a withdrawal from tracker mortgages and represented the most accurate information available at the time. The subsequent assessment of the impact of the decision to remove tracker mortgages has led to the outcome outlined in this letter. We apologise for any confusion this has caused.”

Someone with a variable rate mortgage of 4.25 per cent on a loan worth €250,000 to be paid off over the next 22 years will repay around €1460 each month. Someone on a tracker rate of 0.75 per cent will pay around €1,030.

That means that a customer on the variable rate will pay in excess of €5,000 more each year than the customer on the lower tracker.

He said that the problem had impacted on staff across all levels within the bank and while he was unable to say exactly how many employees had been wrongly kept off tracker mortgages, it was “at least 1,000 and very possibly twice that number”.

Mr Kissane said while some senior management may have been able to afford the higher payments, they would have financially crippled many of those on the lower rungs of the employment ladder.

He said he had been investigating the issue for more than two years and stressed that he wants to hear from more affected staff “as it will self-create anonymity for all involved, which will be of the utmost importance”.

In a statement, a Bank of Ireland spokeswoman said: “In line with the terms of the tracker mortgage examination, we examined all mortgages in scope, and identified all impacted customers whether staff or otherwise.”

Irish banks have paid out more than €120 million in the past two years in redress and compensation to mortgage customers who were wrongly denied tracker rates, and according to some estimates the full cost of the tracker mortgage scandal could top €500 million.