Permanent TSB has been accused of "despicable behaviour" over its treatment of almost 1,400 mortgage customers whose accounts it mismanaged with the result that some people lost their homes.

While all 1,372 affected customers of the bank and its subsidiary Springboard Mortgages are in line for substantial refunds following the conclusion of a Central Bank investigation into the bank's mismanagement of accounts, David Hall of the Irish Mortgage Holders' Association accused PTSB of making "derisory" offers to some of the affected customers.

“What level of compensation would be enough to cover someone losing their home? How can you put a figure on all the stress and fear? PTSB is saying to some customers who lost their homes that it is prepared to write off residual debt. Residual debt is the least of their problems,” he said.

“This bank fought this all the way. They took it as far as the steps of the Supreme Court and this is consistent with how they do business,” he continued.

"No heads will roll at the bank. They will be rapped across the knuckles by the Central Bank and that will be the end of it. And remember, this is a State-owned bank. Families have been badly damaged by what the bank is done yet where is Michael Noonan? Where is Enda Kenny or Simon Harris? No money will ever compensate these families for what they have been put through."

Mr Hall said his organisation was offering free legal support to anyone affected by this issue at PTSB.

Shocking culture

Fianna Fáil finance spokesman Michael McGrath described the outcome of the Central Bank’s enforcement investigation as indicative of a “shocking culture in Irish banks in which the interests of customers ranks very low in their priorities”.

Mr McGrath described the actions of PTSB as “appalling”. He said the bank had “essentially adopted a steamroller approach in which they used every possible tactic right up to taking the case to the Supreme Court in order to deny customers the rights to which they were entitled”.

Ombudsman

He said there was a risk that, had six years elapsed from the date the overcharging had begun to the point at which a customer had become aware of it, they could have been left without the option of taking a case to the Financial Services Ombudsman.

“In the interests of full disclosure, PTSB should state if this was a deliberate strategy on their part,” he said.

“Now that PTSB have put their hands up and admitted their failures, they must ensure that all of those who lost out are compensated quickly so that they finally put the issue behind them,” he added.

Sinn Féin finance spokesman Pearse Doherty echoed Mr Hall's criticism of the Government.

While he welcomed the "belated move" by PTSB to provide redress to customers unfairly moved off tracker mortgages, he accused Minister for Finance Michael Noonan of "sitting on his hands while people lost their homes" despite this issue being in the public domain for the last five years.

“Three years ago I sat with a family who were at risk of losing their home and I learned when going through their loan documents PTSB had wrongly moved them from a tracker mortgage to a fixed-rate mortgage. I raised this directly with the bank when their officials appeared in front of the [Oireachtas] Finance Committee in 2013,” he said.

“Others have raised this issue as far back as 2010. Yet in all that time, the Minister has sat on his hands while some families lost their homes and others were put under undue pressure to meet increased repayments.”