Permanent TSB has established a Mortgage Product Review Group to scrutinise its suite of home loans and to establish whether there are any cases where the contractual terms and conditions attached to mortgage accounts were not being fully honoured by the bank.

Ger Mitchell, a member of PTSB’s executive committee, is to lead the review supported by senior manager Gillian O’Shea along with a bank team and external independent expertise in the areas of conduct risk and product design.

In July, State-controlled PTSB announced a “serious failure” in how it managed interest rates on 1,372 mortgage accounts.

The issues involved PTSB’s failure to inform certain customers of the consequences of breaking early from a fixed-rate or discounted tracker period.

Breaking early

The consequences of breaking early were that customers lost their contractual right to be offered a tracker rate in the future. Instead they were put on standard variable rates, which proved more expensive.

The failures were described at the time by the Central Bank of Ireland as “serious” and include mortgage overpayments, mortgage arrears, legal proceedings and a loss of properties in 61 cases.

Some 1,152 PTSB accounts were subjected to this review.

The balance of the 1,372 mortgages were with Springboard, a former subsidiary of PTSB.

Commenting on the establishment of the group, PTSB's chief executive Jeremy Masding said: "We have no expectation that there are widespread, systemic issues but we think it is appropriate - given what we learned earlier this summer - that we undertake a thorough review of this nature at this time.

“If through this exercise we uncover any issues then we will contact customers and take whatever steps are necessary to correct their positions as quickly as possible.”

PTSB said it would contact customers in the event that any issue relating to their mortgage was identified.