A Kerry businessman was overcharged just over €664,000 in interest by KBC Bank Ireland after it wrongly withdrew his tracker mortgage rate.
His is one of the biggest cases of its kind in the tracker mortgage scandal, which is estimated to have cost about €1 billion.
While more than half of the 40,000 people affected have settled for €10,000 in redress and compensation, he has so far received €202,512.
It is one of the biggest payouts by any bank so far, and is on top of the return of the €664,563 in interest KBC Ireland has admitted he was wrongly charged.
But the man, who is now unemployed, is appealing the compensation and redress he has received.
He has also instructed solicitor John Cashell, of Tralee and Listowel-based Cashell Solicitors, to sue the bank.
Between 2006 and 2008, he made regular mortgage payments on five buy-to-let homes he owned.
But in January 2009, by which time the wrong interest rate was being applied, he was starting to struggle to pay his increased monthly mortgage payments.
Restructure
He tried to restructure his loan and reach an accommodation with KBC Bank but failed.
Receivers were appointed to his five properties in December 2011 and repossessed.
“Our client’s marriage irretrievably broke down due to the strain and pressure of the repossession of all his properties,” Mr Cashell said.
“We are in no doubt that KBC’s error was our client’s downfall.”
A KBC Bank spokeswoman said: “KBC cannot comment on individual cases.
“KBC would like to apologise sincerely to people who were affected by the errors that occurred in relation to tracker mortgages.
“The total number of mortgage accounts impacted is 3,769.
“All of our efforts have been focused on working with customers to right the wrongs that they have experienced.”
According to letters from KBC Bank to the businessman, the bank started investigating incorrect interest charges on his account in 2017.
This was nearly two years after the Central Bank instructed the State’s main mortgage lenders to review tracker mortgage-related issues affecting tens of thousands of customers.
‘Failure’
And on December 21st, 2017, an executive director of KBC Bank wrote to him and informed him: “Your mortgage was within the scope of the review and impacted by our failure.
“We sincerely apologise for this failure and are committed to resolving this with you in full and as quickly as possible.”
However, the bank denied overcharging played any part in the businessman losing his properties.
On January 30th, 2018, Dara Deering, executive director of retail banking at KBC, told him in a letter: "We acknowledge you did lose possession of your property.
“We have concluded that the fact that we applied an incorrect rate on your mortgage account for a period of time was not a factor in the loss of possession of your property.”
He also confirmed: “In 2008, we withdrew a tracker interest rate from you during the period of your payment arrangement, which should not have happened.
“Therefore you are due a refund in respect of this.
“We have determined that you are entitled to redress and compensation.”
Customers affected by the tracker mortgage scandal had, according to the Central Bank earlier this year, lost 315 houses “as a result of lenders’ failings”.
Ownership
The average redress and compensation paid in respect of loss of ownership of homes is between €162,000 and €194,000.
KBC Bank is one of five main lenders – including AIB Group, Bank of Ireland Group, Permanent TSB and Ulster Bank Ireland – which account for around 98 per cent of affected customers.
While a majority have received payments up to €10,000, at least 830 have received payments in excess of €100,000.
A smaller proportion of these have received over €150,000.
The highest amount paid in compensation and redress is believed to be the €380,000 paid to a Galway couple who were overcharged by €1.23 million, as reported by The Irish Times earlier this year.
