Matthew Elderfield: regulator

AIB is facing at least one more suspected case of overcharging its customers, senior sources have told the Sunday Tribune.

The patience of senior politicians and regulators is said to be running out with the banks, after the new head of financial regulation, Matthew Elderfield, last week revealed that AIB overcharged 40,000 customers.

Michael Moynihan, chair of the Oireachtas economic and regulatory affairs committee, said he was angered to learn last week that the Financial Regulator had been informed about overcharging at AIB. His committee in May questioned AIB on the bank's overcharging customers in previous years.

"Senior people from AIB appeared before the committee. They did not tell us about the further overcharging case going on in the organisation. I am disappointed they didn't inform the committee about the investigation," Moynihan said.

The Sunday Tribune has been told that the AIB auditors have uncovered at least one more overcharging case and that the Financial Regulator has been informed.

Separately, AIB staff were hit by a new wave of rumours on Friday that Colm Doherty, the newly-appointed managing director, would soon announce a plan to cut 1,500 jobs. But sources played down the prospects of the bank announcing any job plans before receiving European Commission approval for refinancing and restructuring.

Across its Irish operations alone, AIB employs over 7,700 in its retail division in the Republic, 2,560 staff in capital markets, 2,700 between First Trust in the North and its GB operation, and 3,000 people at the AIB Group division.

New regulator Elderfield is said to have told politicians in recent weeks he was determined to take "a tooth and comb" to uncovering overcharging at all the banks.

A spokesman for AIB said on Friday that the bank "continually reviews its products and procedures".

In late 2004, AIB was revealed to have levied excess charges of €34.2m, and in 2006, the bank confirmed it overcharged customers over several years by another €31.6m.

A spokeswoman for the Financial Regulator said on Friday it could not comment on ongoing supervisory matters with regulated institutions.

When revealing the overcharging case of 40,000 customers last week, the regulator had made it clear it was examining "a number of overcharging issues of varying levels of complexity across banks and insurance firms; some are legacy issues and part of ongoing reviews, while others are more recent and our work in this area continues".

It said: "The Financial Regulator is concerned that financial institutions continue to experience control failures that result in customers being overcharged. While the complexity of cases varies, it is nevertheless disappointing for consumers that resolving errors and providing restitution can be so drawn out at times."