<\/p>\n
AIB\u00a0is conducting a comprehensive review of customer mortgage accounts with regard to tracker rates. The review\u00a0is part of an industry wide investigation, required by the Central Bank of Ireland.<\/p>\n
The review has found that we fell short on our obligations to some customers.\u00a0This resulted in these customers being charged too high a rate of interest on their mortgage accounts.<\/p>\n
We are taking\u00a0certain steps to correct our failure depending on the individual customer\u2019s circumstances, which include:<\/p>\n
These steps are in line with the principles outlined by the Central Bank,\u00a0and key aspects of our work are reviewed by an independent third party, KPMG.<\/p>\n
Our priority is to put things right for our customers who have been affected.<\/p>\n
Earlier this year we announced that we had made an additional provision, to\u00a0cover the application of an FSPO\u00a0decision on an individual\u00a0tracker\u00a0complaint to a wider customer group of c. 5,900 accounts. These customers had an option to choose a prevailing tracker rate at the end of a fixed rate period as detailed in their contract; and previously received a payment of \u20ac1,615 under the Tracker Mortgage Examination.\u00a0 For further information on the application of the FSPO decision click\u00a0here<\/a>.<\/p>\n Following intervention by the Central Bank, c. 300 of the prevailing rate customers, who rolled off their fixed rate very shortly after tracker rates were withdrawn on 10 October 2008, were reviewed and deemed impacted under the Tracker Mortgage Examination. We wrote to these customers regarding both the Tracker Mortgage Examination and the FSPO decision and made payments to these customers during October\/November 2020.<\/p>\n<\/div>\n The FSPO has made a decision in relation to a complaint where the customer did not have the option\u00a0to choose the then prevailing tracker rate at the end of a fixed rate period. This issue occurred between October 2008 and December 2013 when AIB had withdrawn tracker rates.<\/p>\n Earlier this year we announced that we had made an additional provision, to\u00a0cover the application of the FSPO\u00a0decision on an individual\u00a0tracker\u00a0complaint to a wider customer group of c. 5,900 accounts. The rollout of this decision relates to a group of customers we wrote to previously (when we wrote to affected customers in 2018 on this topic we provided a payment of \u20ac1,615).<\/p>\n The FSPO made an award on an individual FSPO complaint. The award was a 12% write down of the capital balance at the time the fixed rate period ended and a refund of interest charged on that 12% capital amount.<\/p>\n Given other customers had similar\u00a0terms and conditions and circumstances as this complainant, we have\u00a0applied the award given in this FSPO decision to these customers. The application of the FSPO decision was to provide a fair and proportionate remedy.<\/p>\n We\u00a0have reviewed each account individually and calculated the balance adjustment and interest payment required in each case. This involved reducing the mortgage account balance by 12% from the date the fixed rate period in question ended, refunding by cheque interest charged on that 12% capital amount during the intervening period and adjusting the repayments going forward given the capital reduction. Where accounts are closed the adjustment\u00a0has been made by a cheque payment.<\/p>\n The rollout of the FSPO decision is now complete. Letters have been sent to all impacted customers.<\/p>\n <\/p>\nApplication of the FSPO Decision<\/h4>\n