by Ronan Coburn | Feb 28, 2025 | Topical in Irish Banking Sector
https://www.pressreader.com/ireland/the-irish-mail-on-sunday/20250202/282041922822238 Mis-selling Strategies Earlier this month, the ‘€5M hush Money’ headline refers to compensation, under a Confidential Mediation outcome. The beneficiaries were a cohort of EBS Managers/ Tied-agents who were victimised for objecting to the Bank’s AIB Belfry mis-selling strategies, inter alia. Compensation to these former EBS executives consisted to (i) a financial consideration, (ii) debt write-downs and (iii) legal costs. Each settlement to an estimated 16 EBS Executives/ Tied Agents from around the country, mandatorily included a Non-Disclosure Clause. Paradoxically these NDAs were targeted at ensuring that AIB’s illegal activities remained undisclosed, under threat.https://thebottomline.ie/wp-content/uploads/2022/05/IMG_7763.png In the ensuing years, the final four AIB Belfry products collapsed in value resulting in investors, in some cases losing all of their life savings. AIB Belfry unsecured sunk outcome Some of the impacted ill-fated Investors invested their Pension Funds into AIB Belfry products. Others were encouraged to take out Borrowing facilities with AIB for Belfry Products. While at the same time the Bank fully recovered its own stake in AIB Belfry investments. AIB Belfry stakes by the Bank itself, were initially structured, to encourage private investors to lay out their own cash on the false understanding that AIB saw fit to ‘share’ the assets performance risks. In very many cases, AIB engaged in a variety of willful slight-of-hand mis-selling strategies. These were actioned subliminally. Over twenty years following on from the wholesale AIB Belfry mis-selling, remaining uncompensated Customers should now be considered to be Vulnerable Customers under the mandatory Financial Regulator’s Consumer Protection Codes, https://www.centralbank.ie/docs/default-source/regulation/consumer-protection/other-codes-of-conduct/consumer-protection-code-review/guidance-on-protecting-consumers-in-vulnerable-circumstances.pdf?sfvrsn=d55f631a_1 Although the Financial Regulator-prompted the launch of an AIB Belfry Redress Scheme in 2022, its slow-motion operation in...
by Ronan Coburn | Sep 4, 2023 | Topical in Irish Banking Sector
With some foresight, many Irish Investors are sorry they didn’t ponder a little longer over the word ‘Belfry’. This is a bell-tower, or part of a tower or steeple in which bells are hung. It may obliquely have represented a warning bell. The AIB Belfry Review (of 2nd to 6th Funds, in particular) is now a major financial debacle that initially involved over 2,500 negatively impacted investors (who invested more than €120M, between 2002 and 2006). This long festering fiasco predates the Tracker Mortgage-related compensation scheme. The Bank tried to evade responsibility through defending legal proceedings, (that commenced in 2014) though the time-barring of fraud claims against it under the Statute of Limitations. However, in 2020 the Supreme Court disarmed this, in place of ‘a sensible and pragmatic approach’. “On consent, the allegations of fraudulent concealment made against the defendants were withdrawn as part of the settlement last year, the High Court heard at the time.” https://www.irishtimes.com/business/financial-services/aib-sets-aside-100m-for-belfry-funds-compensation-1.4638661 Some of these highly geared (i.e., involving back-to-back Borrowings by an intermediary investment vehicle) Investment Transactions anecdotally involved negligent mis-selling, wrongful disclosure in Prospectuses, conflict of interests, fraudulently manipulated file documents on appetite-for-risk inter alia. Although designated ‘Medium-risk’, they were ‘High-risk’. It is already clear that the Belfry Scheme is similar, in part to the Bank’s Tracker Redress Scheme, in so far as processing cases is like ‘pulling teeth, in slow motion’ with negligible account taken of the dimensions of (a) the Time-Value-of-money, (b) Opportunity Costs and(c) Consequential losses, inter alia. There is an apparent reluctance for the Financial Regulator to oversee this Scheme, (unlike its establishment & oversight of the Tracker Mortgage...
by Ronan Coburn | Feb 7, 2019 | Tracker Mortgages' Scandal
Tracker Redress Cases’ Update 2019 Aggregate Tracker Redress & Compensation is hurtling towards 1 billion Euro. The Central Bank of Ireland generated this artful Infographic Central Bank Tracker Redress Feb 2019 update . The highlights of which are: 39,800 borrowers have been impacted under Tracker Redress since 2015. Tracker Redress to Dec 2018 is Euro649 million. 15 Irish Banks or banking groups implicated culminating in setting in place of a formal scheme for Tracker Redress. There is a Regulatory scheme in place whereby the culpable banks must pay, inter alia (a) Compensation, (b) redress, and (c) recognition of the Time Value of Money, (d) demonstrable consequential losses, (e) medical costs with respect to distress . Sums offered by way of redress to date can be accepted without compromising future pursuit options. Therefore affected Borrowers may continue actions through (i) Appeals to allegedly Independent Appeals’ panels, (ii) Financial Services & Pensions Ombudsman and/or (iii) the Courts. In addition to (A) returning the Present Value of their own money back to Borrowers, all offending Banks must (B) recognize valid entitlements to incremental evidenced Consequential Losses (indirect but attributable costs) and financial estimations of negative qualitative consequences. Allegedly independent overseers of the various Tracker Redress schemes are EY., Grant Thornton, KPMG, Mazars, PWC & Deloitte. Central Bank Operations: A number of Irish lenders under investigation by the Central Bank in relation to the State’s €1 billion tracker mortgage scandal will be sanctioned with multi-million euro fines later this year. There is uncertainty on how many of the cases involving the six mortgage lenders, (including AIB and its EBS subsidiary, Bank of Ireland, Permanent...
by Ronan Coburn | Sep 25, 2017 | Topical in Irish Banking Sector
Interest Offset Mechanisms are a facility where two or more bank accounts are grouped for the purposes of charging interest. On a daily basis, the Bank’s computer combines the cleared balances of these accounts, and accrues interest (at a pre-agreed lending rate) to this net balance. Interest Offset Mechanisms are typically available to two or more current accounts, which are either in the same business name or in the names of related companies. Certain company law requirements must be complied with, before an offset can be implemented between two limited companies. Interest Offset Mechanisms must not be assumed to be in place. In many instances, Irish banks will not unilaterally volunteer to set one up unless instructed by the client. A typical Standard Lending Term involves offsetting between two or more current accounts, at a standard rate of 1 per cent. It is less common for offsetting to take place between a current account and a loan account. Some banks claim not to provide Interest Offset Mechanisms to client facilities in any circumstances, while others allow only a limited offset – for example, up to a certain debit balance threshold. Some banks can, in the right circumstances, implement Interest Offset Mechanisms between current accounts held in different branches of the same group. Interest Offset Mechanisms are a major driver of bank profitability, and can be an integral part of the lending facility structures of: public limited companies; large private companies; professional practices; not-for-profit sectors, including the public sector and charities. For example a motor dealership might require an interest offset mechanism between: the motor dealership and the related computer...
by Ronan Coburn | Sep 1, 2017 | Banking Inquiry 2014
If Data is the new Gold, then GDPR [the Regulation] is the Great Equaliser, for European citizens at least. Many government bodies, businesses of various sizes and large corporates are already bemoaning the bureaucracy & potential sanctions accompanying the introduction of GDPR as mandatory in May 2018. Data is knowledge and knowledge is power. That is why data protection is central to our democracy here in Europe, and is a Fundamental Right of all European Citizens under the European Charter of Fundamental Human Rights (Treaty of Lisbon, Article-8 December 2009). GDPR silver lining strand-1 – is that it not only seeks to affirm this fundamental right but goes much further in specifying a set of Regulations (or fully fledged European regulations – laws) to deliver-on this Fundamental Right to Data Protection. The personal data of any particular customer is intrinsically worth very little to anyone else, but the ‘mining’ or ‘harvesting’ of such data gives it a very significant value to the likes of FANG, (Facebook, Amazon, Netflix, Google). From 25th May 2018 any European citizen has the right to know what data is held on them, and in some cases to demand its deletion. Citizens of Europe can invoke the Right to be Forgotten, by requiring Search Engine Corporates to remove facts about them, not from the web itself, but from results of Searches. GDPR silver lining strand-2 Another strand of the GDPR silver lining, which is less obvious but much more critical is a right of appeal to a human being against decisions which have been taken by an Algorithm (or mathematical model). Computers and Servers are...
