Áine Kenny: Amid the Covid-19 crisis, an Irish bank finds support from an unlikely place

Other critics took issue with the fact that AIB was not going easier on its customers, noting it received a bailout from taxpayers of around €22bn following the 2008 Irish banking collapse.

But the bank has attracted a degree of support from an unlikely source: The customer champion of the banking-wide tracker mortgage scandal, Padraic Kissane.

A financial services adviser, Mr Kissane did much from 2009 to bring the tracker mortgage scandal to light.

The banks are still accounting for their sins through customer reparations.

The big banks have also had to put tens o millions aside in provisions for the large fines that will be imposed by the regulator to take account of their roles in the scandal.

Mr Kissane was subsequently appointed the consumer representative on the Irish Banking Culture Board, set up by as a vehicle for the banking industry to clean up its own house.

Mr Kissane said hat because the quarterly fees and charges were already in place, he did not think they were “utterly unfair”.

“They were payable for the last quarter, so perhaps it would be unfair if they were set aside, based on activity in the previous quarter” which was not affected by the Covid-19 pandemic.

“It was unfortunate they were applied just as the Covid-19 crisis was arising,” he said.

The charges may reduce in the next quarter as banking activity goes down, he said.

Transaction charges are applied when customers use ATMs or lodge cheques, activities Mr Kissane believes will be curtailed during the crisis.

He said he did take issue with the fact that AIB was trying to introduce new charges during a period of financial stress for many people.

And he thought it unfair that customers with little money in their accounts were charged fees, while customers who maintained balances of €2,500 were not charged.

“It is unfair. Most people are living from week to week, and don’t have €2,500 or the facility to keep that balance.

“The people who can pay don’t have to. I think you will see that changing, and that is what AIB’s new measures [over fees for customers with €2,500] were about,” he said.

However, Mr Kissane said that overall, the banks had responded to the economic fallout of the pandemic with customers’ interests in mind. Certainly, more so than they had in the 2008 crisis.

“At least this time you can ring the bank, and there is a process for listening to people who are facing arrears. In 2008, in relation to arrears issues, there was no mechanism in place, it was like a deer in headlights,” Mr Kissane said.

“There is a more customer-centric approach. The banks have delivered so far. The fact that the five main banks agreed to a three month mortgage moratorium... it would never have happened in 2008,” he said.

“If you wanted to take a cynical view on it, you could say the banks have no choice but to be understanding. Lessons have been learnt. You can’t draw blood from a stone.”

However, he said if people were facing difficulties with their banks, that he would welcome them to contact him and he would raise the issues with the lenders.

AIB had defended the charges.

“Due to the normal costs associated with administering customers’ bank accounts, the bank charges standard transaction and account maintenance fees,” it said in a statement.

“These are applied on a quarterly basis, with the most recent fees debited from customer accounts in March for the period November – February.

“AIB provides banking free of maintenance and transactions fees for student, graduate, advantage and basic bank accounts.

“Customers who have a mortgage with us and pay their mortgage direct debit from an AIB current account are also exempt from these changes. Also, customers can avoid these fees by maintaining a balance of €2,500 in their account,” the bank said.

In a new measure, AIB said last week it would refund its personal and business customers any “unpaid charge” fees, which are incurred when there is not enough money in an account to pay a standing order or a direct debit.

“To further assist our customers who are impacted by Covid-19, AIB is refunding any unpaid charges relating to items presented on AIB current accounts during the months of March and April 2020,” it said.

“The unpaid charge to be refunded is €10 per item and is applied when there is insufficient funds in a customer’s account for a payment to be processed.

“We will begin refunding any unpaid charges since March 1 on April 14, and refunds will be applied daily until the end of April. Customers do not need to take any action,” the bank said.

AIB had already retreated from bringing in quarterly maintenance fees and transaction charges for account holders who kept a balance of €2,500, who were previously exempt from such charges.