RegSol Blog


KBC Bank Ireland plc Remanded and Fines €18,314,000 by Central Bank of Ireland for Regulatory Breaches Affecting Tracker Mortgage Customer Accounts

October 2020

Almost as high as Permanent TSB’s €21 million discussed on this blog previously HERE, we had predicted that more was to come with respect to the Central Bank’s Tracker Mortgage investigations.

KBC has admitted to 12 regulatory breaches with respect to for example, the Consumer Protection Code, which were identified during the Central Bank’s investigation. These breaches occurred as a result of the following:
  1. A proactive strategy to convert customers off their tracker rates;
  2. Failure to adequately warn customers entering into interest only or fixed rate periods that they would be unable to return to their tracker rates, at a time when KBC was withdrawing tracker products;
  3. Failure to adequately comply with the Central Bank’s Framework for the TME;
  4. Failure to adequately comply with the Stop the Harm Principles of the TME;
  5. Provision of incorrect information to the Regulator in respect of KBC’s treatment of certain tracker customers; and
  6. Operational & Systems failings.

The Central Bank determined that the appropriate fine was €26,162,857, which was reduced by 30% to €18,314,000 in accordance with the settlement discount scheme and will be paid to the Exchequer. This fine is in addition to the €153,524,363 that KBC has been required to pay to date in redress and compensation and account balance adjustments under the TME to its impacted tracker mortgage customers.

The Central Bank also expressed its dissatisfaction with KBC as highlighted in the following excerpt:

“The Central Bank has imposed a fine at the highest end of its sanctioning powers, reflecting the gravity with which the Central Bank views KBC’s failures. The impact of KBC’s failings on its customers, which related to 3,741 accounts, was devastating and included significant overcharging and the loss of 66 properties. Additionally, KBC’s engagement and co-operation with the Central Bank’s Tracker Mortgage Examination (the “TME”) was deeply unsatisfactory.”

To view the full statement click HERE


By Judy de Castro
Regulatory Consultant