Public statement relating to Enforcement Action against the Governor and company of the Bank of Ireland

Date29 September 2022
Central Bank of Ireland
The Governor and Company of the Bank of Ireland
The Governor and Company of the Bank of Ireland reprimanded and fined €100,520,000 by
the Central Bank of Ireland for regulatory breaches affecting tracker mortgage customers
On 27 September 2022, the Central Bank of Ireland (the “Central Bank”) reprimanded and fined
The Governor and Company of the Bank of Ireland (“Bank of Ireland”) 100,520,000 pursuant
to its Administrative Sanctions Procedure (“ASP”) for a series of significant and long-running
failings i n respect of 15,910 tracker mortgage customer accounts which were impacted
between August 2004 and June 2022. Bank of Ireland has admitted in full to 81 separate
regulatory breaches.
The Central Bank determined the appropriate fine to be €143,600,000
, which was reduced by
30% to €100,520,000 in accordance with the settlement discount scheme provided for in the
Central Bank’s ASP.
This is the largest fine imposed to date by the Central Bank and is in
addition to the more than 186,400,000 Bank of Ireland has already paid to impacted customers
identified prior to and as part of the Central Bank’s Tracker Mortgage Examination (“TME”).
The investigation found that Bank of Ireland failed in its obligations towards its customers under
the European Communities (Unfair Terms in Consumer Contracts) Regulations, 1995, the Code
of Practice for Credit Institutions 2001 and the Consumer Protection Codes 2006 and 2012.
Bank of Ireland’s failures resulted in the loss of 50 properties, including 25 family homes, which
would have been avoided if Bank of Ireland had complied with the most basic and fundamental
of its consumer protection obligations.
All fines collected by the Central Bank are paid to the Exchequer.
The Central Bank’s ‘Outline of the Administrative Sanctions Procedure’ provides for an early settlement discount of up to 30% in order to
promote early resolution of matters, which in turn leads to better utilisation of the resources of the Central Bank.
The key findings from the investigation are that:
1. Bank of Ireland provided unclear contractual documents to its customers. Bank of
Ireland’s Mortgage Letter of Offer (“MLO”) (used when taking out a mortgage) and
Mortgage Form of A uthorisation (“MFA”) ( used when changi ng the applicable rate) were
unclear and ambiguous regarding customers’ right to a tracker rate after a fixed rate period.
2. Bank of Ireland failed to interpret its unclear contractual documents in customers’ best
interests. Bank of Ireland repeatedly, over a period of over nine years, interpreted these
unclear documents in its own favour and denied customers a tracker rate.
3. Bank of Ireland failed to warn customers about the consequences of decisions relating to
their mortgage. Following its decision to withdraw trackers in October 2008, Bank of
Ireland failed to warn customers that they would lose their tracker mortgage entitlements
if they moved to a fixed rate or if they broke early from a fixed rate period. In addition, Bank
of Ireland failed to warn customers, some of whom were in financial distress, that they would
lose a future tracker mortgage entitlement when signing up to a forbearance arrangement.
4. Bank of Ireland implemented an unfair complaints handling practice in respect of
customers. Bank of Ireland implemented an unfair practice of returning customers with
these unclear MLOs and MFAs to a tracker rate only in the event that they queried and/or
complained about their rate. Other customers with the same unclear mortgage documents
who did not complain were not offered a tracker rate.
5. Bank of Ireland’s deficient mortgage systems and controls, contributed to a significant
number of operational errors. Deficiencies in Bank of Ireland’s mortgage system, combined
with human error in the operation of those systems, resulted in customers being wrongly
put on the incorrect interest rate margin and/or product.
6. Bank of Ireland wrongfully excluded customers from the protections of the TME. Bank of
Ireland wrongfully excluded over 5,000 customers from the TME who had received unclear
documents. These customers were excluded arising from the narrow focus of Bank of
Ireland’s consideration of all matters required under the TME. These failures persisted, until
these customers were finally included in 2017, following significant challenge by the Central
Bank. Additionally, during the conduct of its TME review, Bank of Ireland failed to implement

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