Irish bank Permanent TSB fined €21m for tracker mortgage 'failures'

The fine is part of an ongoing investigation into tracker mortgages

One of Ireland's main banks has been fined €21m (£19m) for "serious failings" regarding thousands of its tracker mortgage customer accounts.

The fine is the biggest imposed by the Central Bank in Dublin under its sanctions procedure.

Permanent TSB has admitted to 42 separate regulatory breaches, involving 2,007 customer accounts.

The move is the first in a series of ongoing investigations into tracker mortgages.

Tracker mortgages are a type of variable rate mortgage.

'Unacceptable harm'

What makes them different from other variable rate mortgages is that they follow - track - movements of another rate.

In a statement, the Central Bank said the fine "reflects the gravity with which the Central Bank views PTSB's failings and the unacceptable harm PTSB caused to their tracker mortgage customers".

"From extended periods of significant overcharging to the loss of 12 family homes and 19 buy to let properties," it said.

As well as the reprimand and fine, Permanent TSB has to date also been required to pay €54.3m in redress and compensation to affected customers.

The Central Bank's tracker mortgage investigation found that:

• The bank failed to warn certain customers about the consequences of the decisions they might make relating to their mortgages;

• The bank did not have adequate systems and/or operational controls in place to enable them to meet their contractual and regulatory obligations;

• The bank denied certain customers their corrected tracker rates between 2009 and 2010;

• Made incorrect legal interpretations of contractual terms and conditions.

The Central Bank's director of enforcement and anti-money laundering, Seána Cunningham, said Permanent TSB "failed to put their customers first, with distressing and, in some instances, devastating consequences".

"My message today is clear. Where firms fail to protect their customers' best interests, our response will be robust and the consequences will be serious."