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ALLIED IRISH BANDITS; Bank forced to hand back $35million.

Byline: DECLAN FAHY

THE Allied Irish Bank is to pay back EUR35million to customers it fleeced over 10 years through overcharging for services.

But as bank chiefs announced the payout yesterday they came under fire for escaping punishment for the money-spinning errors, even though they broke the law.

Consumer watchdogs want to see them slapped with fines for the massive blunder.

The Irish Financial Services Regulatory Authority carried out the damning investigation - one of three probes being carried out into the bank's dealings.

Chief Liam O'Reilly said: "We can report that AIB failed in a number of respects.

"In some instances, it charged customers more than it was entitled to. It also failed to notify the regulator, as required by law, in relation to certain regulated charges which it levied on its customers."

As the scandal broke AIB estimated the amount overcharged was EUR14million but it later lodged EUR25million at the Central Bank to compensate those affected.

The report found bank customers paid too much for more than three million foreign exchange transactions.

The bank's chairman said it volunteered to give back the money - even though it did not legally have to. He said: "When we do make mistakes, we do our level best to be candid about them, and to put them right." The bank's chief executive Michael Buckley added: "Our bond of trust with our customers means we are making full payment.

"They are entitled to the assurance that what they pay is not only market competitive, but complies with regulatory requirements.

"Where our own investigation found instances where we made other errors and customers were overcharged we are making full restitution."

Mr Buckley added that the bank will set up a confidential helpline to avoid further banking scandals.

He admitted there was a culture of self-censorship in the bank and the helpline will allow staff who had concerns about practices to pass them on.

Fine Gael's finance spokesman Richard Bruton said: "The overall tone of the response from AIB smacks of complacency and a failure to understand the level of public frustration that needs to be addressed.

"The bank's statement on the matter is 1,800 words long, but the word 'regret' appears only once.

"The public will be left with a sense of grievance that no penalty has had to be paid beyond just making good what was wrongly collected.

"The regulatory system has been found seriously wanting."

The Consumers' Association of Ireland said the bank does not seemed to have learned some lessons from the scandal.

It said: "AIB's response to the overcharging of customers indicates there is no change in the culture at the bank."

declan.fahy@irishmirror.ie

CAPTION(S):

CHIEF: Mr Buckley yesterday
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Publication:The Mirror (London, England)
Date:Jul 24, 2004
Words:451
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