Central Bank issued fines totalling more than €5m last year

The Central Bank of Ireland issued fines in excess of €5 million to financial service providers last year.

Among those reprimanded and fined were Ulster Bank Ireland, FBD Insurance, Bank of Montreal Ireland and LGT Capital Partners.

The largest fine issued was to Ulster Bank, which was fined €3.5 million for IT and governance failings. The failings resulted in approximately 600,000 customers being deprived of essential and basic banking services over a 28 day period during June and July 2012.

The fine and reprimand were in addition to a redress scheme required and overseen by the Central Bank under which Ulster Bank has paid approximately €59 million to affected customers.

The Central Bank said governance failures relating in particular to outsourcing featured in two significant enforcement cases taken last year.

“These cases related to firms from different industry sectors thereby highlight that governance arrangements with regard to outsourcing are an issue across the regulated sectors,” the bank said.

UniCredit Bank Ireland was fined €315,000 for being exposed to too many Spanish and Italian bonds on a number of dates in 2011 and 2012.

The Central Bank also said UniCredit Ireland, a subsidiary of Italy’s biggest lender, had too much exposure to a single unnamed client between November and December 2012.

The Central Bank fined financial service provider LGT Capital Partners (Ireland) €95,000 for failing to ensure it had in place and used sound administrative and accounting procedures, while FBD Insurance was fined €490,000 for a number of breaches of the consumer protection code between 2006 and 2011.

Among the breaches identified at FBD were a failure to ensure entities it had outsourced regulated activities to were compliant with the code; inform consumers that the loss adjusters it had appointed were working in the interests of FBD Insurance; have adequate complaints handling procedures in place and pass relevant information on to consumers about their right to complain and take the matter further to the ombudsman; and provide terms of business documents or other relevant information to consumers.

Provident Personal Credit Limited was fined €105,000 for breaches of the legislation relating to certain moneylending practices. Following an investigation, the bank found, that in relation to 117 loans provided out of the moneylender’s Letterkenny office between 2009 and 2012, the firm failed to advance the full amount of the loan to those consumers that they had entered into agreements with.