Litigation and Enforcement

Author: Clerkin Lynch LLP

Date Published 11/07/2022

Central Bank issues a large fine to EBS

The Central Bank of Ireland (the “Central Bank”) reprimanded and fined EBS €13,400,000 on 22 June 2022 pursuant to its Administrative Sanctions Procedure (“ASP”) for a series of significant failings in the treatment of its tracker mortgage customers. EBS has admitted to 36 separate regulatory breaches.



EBS is licensed pursuant to section 9 of the Central Bank Act, 1971 as a bank. Previously it was run as a mutual society up until July 2011. It was then demutualised and incorporated as a bank, as part of a recapitalisation and acquisition by Allied Irish Banks p.l.c. (“AIB”). EBS has 68 branches and approximately 440,000 customer accounts. Its principal activities consist of retail banking services, including mortgage and savings products.

EBS introduced tracker mortgages in early 2004 but withdrew them in October 2008 for new customers in common with other lenders operating in the Irish market.


The investigation found that EBS failed in its obligations towards its customers under the Code of Practice for Credit Institutions 2001 and Consumer Protection Codes 2006 – 2012 (together the “CPC”). Key findings are that EBS:


  • Failed to properly manage its mortgage services to customers, resulting in breaches of customers’ consumer protection rights and/or contractual rights: 
  • Failed to adequately warn customers of the consequences of their decisions relating to their mortgage:   
  • Failed to provide clear mortgage documentation to customers: and
  • Failed to handle customer complaints in a fair and consistent manner.


Among the 36 regulatory breaches of the CPC which EBS has admitted to are failing:

–  to have or effectively employ adequate resources, policies, procedures, systems, and controls;

–   to act honestly, fairly and professionally, in the best interests of customers and the integrity of the market;

–   to act with due skill care and diligence in the best interests of its customers;

–   to ensure that, in all of its dealings with customers, it made full disclosure of all relevant material information in a way that sought to inform the customer;

–   to ensure that all information it provided to customers was clear and comprehensible, and failed to bring key items to their attention;

–   to correct errors, handle complaints speedily, efficiently, and fairly; and

–   to resolve all errors speedily and no later than six months after the date the error was first discovered.


Fine and Compensation

The total fine was €19,143,000 and was levied at this level in view of the nature, seriousness and impact of the contraventions. This was however then reduced by 30% to €13,400,000 in accordance with the settlement discount scheme provided for under the ASP due to mitigating factors including purposeful, proactive and constructive engagement with the Central Bank which saved it time and resources in the investigation. However it is worth noting that the fine is separate from the more than €105,000,000 that EBS has been required to pay to date in redress, compensation and account balance adjustments to impacted customers. Much of this was calculated as part of the Central Bank’s Tracker Mortgage Examination (the “TME”), established by the Central Bank as an industry-wide review in 2015 to address any circumstances in which lenders were not providing tracker customers with their tracker mortgage entitlements.