Allied Irish Bank come under fire by politicians and business groups after it admitted to overcharging foreign exchange customers over the last 8 years to the tune of up to €14 million.
In a statement released this evening in response to questions put to it by RTÉ News, the bank confirmed that it had overcharged some customers and said it was in discussion with Irish Financial Service Regulatory Authority (IFSRA) about how to compensate customers.
The IFSRA has ordered an investigation into the impact the overcharging, which related to non-cash transactions, has had on AIB customers.
It also wants to know how the bank plans to compensate the customers who were overcharged and how the overcharging was able to continue undetected for so many years.
The IFSRA said they received an anonymous telephone call two weeks ago, making "certain allegations" relating to claimed irregularities over foreign exchange charges at AIB dating back to 1996, and the issue had been raised at a meeting with the company last week.
Speaking this evening, the IFSRA Consumer Affairs director, Ms Mary O'Dea said the Regulatory Authority would "deal with this at the highest level".
An AIB spokesman said the bank "fully accept that we made a mistake and we are embarrassed about it", adding that an inquiry had been set up to find out "who knew what and when".
Reaction to the news was swift with Labour's spokesperson on Finance, Ms Joan Burton saying the revelations were "a shocking indication of the extent to which some financial institutions are prepared to profiteer at the expense of
their customers".
She said it appeared that "despite all the scrutiny" to which banks have been subjected in recent years "some in the financial sector have still refused to learn their lesson" and seem prepared "to squeeze every possible cent out of their customers".
Ms Mae Sexton from the Progressive Democrats described as "outrageous and a blatant rip-off of Irish consumers" the revelations and said the Bank's admission of "deep embarrassment and regret" was "wholly insufficient". She said the fact that the overcharging only came to light as a result of an anonymous tip-off was "deeply worrying".
ISME, the Independent Business Organisation is extremely concerned but not surprised at the revelations that AIB have been "ripping-off" an unidentified number of their customers with regard to foreign exchange transactions.
Mr Mark Fielding ISME Chief Executive said it was "ironic that in the week the Irish Bankers Federation have been throwing out spin with regard to Irish bank charges being cheaper than those in the UK one of its main constituent members has admitted overcharging with regard to bank transactions".
