This article was originally published by Independent.
Money may be ‘no good’ to many families who have lost their home as a result of overcharging by Permanent TSB if they have also been declared bankrupt, a financial advisor has warned.
As the 22 families rendered homeless anxiously await an offer letter of compensation from the bank, David Hall of the Irish Mortgage Holders Organisation (IMHO) pointed out that any lump sum on offer to them would probably be immediately seized by the State or by creditors because of the bankruptcy terms.
“To a certain cohort of people, money is no good – they need homes,” he said.
He said the families are “shocked and angry” that they had not been contacted by the bank to inform them of the overcharging in advance of Tuesday’s press conference.
“These people have been shafted,” he said, adding that they were bitterly disappointed not to have been the first to find out that they had been personally affected.
“One person described it as being like you were accused of something you didn’t do and then exonerated – but that everyone else found out before you did,” said Mr Hall.
He told the Irish Independent that he knows of one or two families who were forced back to living with their parents as a result of losing their homes.
Several more are back in the rental market.
The families have been advised not to speak out in public about their situation until they receive their offer of compensation from the bank.
This is for fear the letter may include a confidentiality clause which could render any such offer void, Mr Hall said.
In all, around 1,372 mortgage customers from PTSB and their former subsidiary, Springboard, are believed to have been affected by the ‘serious failure’ by the bank to manage interest rates.
The bank is offering €50,000 compensation for those who lost their homes and €25,000 for buy-to-let investment properties.
It is also offering to write off the balance of debt owed on these loans.
Yesterday, at least 200 families who fear they have fallen victim to overcharging by the state-owned bank contacted the IMHO seeking advice on how to proceed.
Meanwhile, Permanent TSB are shortlisting an appeals panel for customers unhappy with the settlements on offer – though the Central Bank will have the final say on who is appointed.
A spokesman for PTSB said it is expected that the panel will be up and running “within the next couple of weeks”.
“The shortlist will be made up of financial and legal experts.
“We will come up with the shortlist and the Central Bank will decide then who is finally appointed to it,” he said.
Although he was unable to say how long appeals would typically take, he said that the bank would be eager to resolve any cases “as soon as possible”.
Customers will be able to accept settlements from PTSB and still take a case -either to the appeals panel or pursue legal action through the courts.
Mr Hall revealed that his organisation is poised to apply to the Central Bank to sit on the Appeals panel because they “want consumers to be properly represented this time”.
Jerry Beades of the New Land League of Ireland said that what Permanent TSB are offering is “absolutely appalling”.
“I mean, you lost your house – so they might give you €50,000?” he questioned.
He claimed banks “keep settling cases like this outside court”, leaving no record and meaning the system can never be changed for the better.