The bank, which has just handed back its licence to the regulator, overcharged 90,000 mortgage customers.
The Irish Independent reported last November that the homeowners with mortgages originated by Ulster Bank would have to be refunded after a blunder meant they had the wrong interest applied to their accounts.
The mortgages were sold and are now with AIB, PTSB and vulture funds.
Some of the affected customers have since redeemed their mortgages.
The departed bank has only now written to the impacted customers telling them how much they are getting in refunds and explaining what went wrong – seven months after it was first reported on by the Irish Independent.
Today’s News in 90 Seconds – June 30th
Last Friday, Ulster Bank returned its banking licence to the Central Bank after 185 years in Ireland.
The company will be renamed Ulydien DAC and will operate as a retail credit firm as it continues a “phased and orderly” withdrawal of its operations. It is part of the NatWest Group in the UK.
One customer letter from Ulster Bank, seen by this publication, explains that there has been an overcharge of almost €600 due to the miscalculation of interest on the home loan.
The mortgage is now with PTSB, and the overcharged amount will be credited to the mortgage account.
The monthly interest due on the mortgage was miscalculated, the six-page letter said. If not corrected, the mortgage would have taken longer to pay off.
The capital amount owed was not impacted, according to the letter.
The blunder meant mortgage repayments were spread over a term that was up to two months longer or shorter than the contractual term of the loan.
The bank had described it as a mortgage system-generated error, which was discovered as part of the bank’s phased withdrawal from the Republic.
The average overcharged amounts are understood to be relatively small.
We previously said it would take a number of months to progress. Nothing has changed
Asked why it has taken so long to write to customers and refund them, Ulster Bank said: “It’s due to the broad scope of the review – about 90,000 accounts – and we previously said it would take a number of months to progress. Nothing has changed in that respect.”
It is understood the now-departed bank is contacting overcharged customers on a phased basis.
Ulster Bank is understood to be working closely with all financial institutions that bought or are servicing its mortgage portfolios to rectify the matter.
The Central Bank was asked why the refunds process is so slow. It did not answer the question directly. It said: “The Central Bank is aware that Ulster Bank is engaging with customers in respect of an error in amortisation calculations on its mortgage system.”
It said it continues to engage with Ulster Bank to ensure that consumers’ interests are protected, communications are clear and transparent, and that any consumer detriment is identified and appropriately remediated.
The handing back of its licence to the Central Bank marks the end of an 185-year association for Ulster Bank with this country. It will continue the phased and orderly withdrawal of its operations in the Republic of Ireland.
Customers will receive a letter advising them of the changes and do not need to take any action at this time, it said.
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