Over the last number of weeks the media has been awash with news of the latest financial scandal, this time concerning Permanent tsb.
Permanent tsb is one of the largest providers of home mortgages in the country. Many mortgage holders availed of fixed interest rates when taking out their loans in order to give certainty as to what repayments would be made in the early years of a mortgage. Once this period expires the Permanent tsb mortgage holders were entitled to return to an advantageous tracker mortgage or a variable rate mortgage. It has now been established that Permanent tsb did not allow the approximately fourteen thousand mortgage holders this opportunity. In depriving them of their entitlement Permanent tsb made those mortgage holders pay additional sums over and above what they were entitled to pay. This amounts to overcharging.
When the issue first came to light Permanent tsb denied any wrong doing. Complaints were made to the Financial Ombudsman. These complaints were defended by Permanent tsb. The dispute then came before the High Court and again Permanent tsb defended their position fully.
The High Court found against Permanent tsb and in turn then they appealed it to the Supreme Court before withdrawing the objection.
This now means that Permanent tsb are liable to those account holders who they have overcharged.
All account holders have now been circulated with a standard pack of information in which Permanent tsb set themselves the amount of compensation to be paid. There is no apology for this wrong doing. Account holders are told in a very matter of fact way that there has been overcharging and that compensation will be paid.
The important point to note is that the level of compensation is being dictated by Permanent tsb. Account holders are given a very short period of time within which to make their minds up or else risk losing the opportunity of having compensation paid. This system is fundamentally flawed and completely disregards the rights and entitlements of account holders.
This is not the first time that a financial institution has overcharged customers. Such financial institutions do not make voluntary disclosures that there has been overcharging. Generally speaking any practice of overcharging arises as a result of some form of investigation or complaint.
In any situation where a customer of any financial institution is overcharged there is a breach of a contract between the customer and the bank. Banks are entitled to levy fees. They are not entitled to surcharge fees. Where this happens it amounts to taking something without permission and that in its own right is a criminal act.
Any person who finds themselves the victim of surcharging, such as the case here with Permanent tsb, needs to be independently legally advised so as to ensure that the full extent of the wrong doing is identified and that proper and adequate compensation is provided. It is not simply a question of the financial institution providing the solution to their problem. The solution must be fair and must be equitable.
While the headlines at the moment focus on Permanent tsb, other financial institutions have also been involved in overcharging. All customers of financial institutions need to be extra vigilant so as to make sure that the financial institutions are taking what they are entitled to, and no more.
Unfortunately the level of surcharging across financial institutions is at record levels, and every day there are further examples seen of financial institutions taking what they shouldn’t.
In all circumstances customers need to be careful and if there is any suspicion that something is wrong independent legal advice needs to be taken immediately.