16,000 Alter Bank mortgage customers are waiting to receive payments as a result of a bank conversion error, reports RTE.
The errors concerned customers who were in a difficult financial situation and cooperated with the bank’s debt service unit
When borrowers end their forbearance period, the bank miscalculates how much their repayments should change and they end up paying less.
This means that the customer’s loan amount did not fall as fast as it should have.
As a result, more interest is paid than what should have been paid.
In total, the bank says 16,000 customers have been affected.
It wrote to them informing them of the error and asking them to pay to offset the underfunding.
“For the vast majority of impacted customers this is a historic issue, and their monthly repayment amount has since been recalculated and is now correct. To put this right for customers, Ulster Bank is making a payment to live impacted customers to cover the underfunded amount as well as any additional interest incurred. A compensation payment and any additional interest incurred will be made to customers who have since redeemed their mortgage,” it said, reports RTE.
The bank apologized for the error, saying it came to light during a review of mortgage customer repayments.
Most of those affected have already received treatment under a process that began in March.
The average redress amount is €350 and over 80% of affected customers receive €400 or less.
5,000 borrowers will receive 5 euros or less or face no financial loss.
Affected customers include those who defaulted on their mortgages, moved to another bank as part of Ulster Bank’s exit or were previously sold to an investment fund, reports RTE.
This issue affects a small number of existing customers
The event, first reported by the Irish Independent, follows a series of lapses at banks in recent weeks.
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