BOI’s Blunder Sparks Fears For Borrower Credit Ratings

A blunder on around 35,000 KBC mortgages transferred to Bank of Ireland has led to fears the borrowers’ credit ratings may be impacted.

The mortgage ‘start date’ was incorrectly entered into Bank of Ireland systems, and as a result, the lender did not submit the data to the Central Bank’s Central Credit Register (CCR).

And Bank of Ireland has admitted that the gap in the monthly updates could impact loan applications.

The bank has written to all the ex-KBC customers warning them of the problem, which it is “working to fix as soon as possible”.

The blunder affects around half of the 70,000 mortgages that were transferred to Bank of Ireland when KBC closed its Irish operations.

A spokesman for Bank of Ireland said: “To date we’ve had no confirmation of a loan application being impacted, but if any customer has a specific query, they can contact our team and we will support.

“We have also informed other lenders about the error so that they are aware of it.”

Last year, Bank of Ireland was fined €463,000 by the Data Protection Commission (DPC), after an investigation found 47,000 customer accounts were accidentally altered in a manner that “may have damaged customers’ credit ratings and prevented them getting loans.”

A recent Bank of Ireland letter to affected mortgage customers said: “We do not believe this error is likely to have affected the customer, but if somebody applied for a loan or another form of credit, the gap in the monthly updates to the CCR may have been seen by a lender, so they can use our letter as proof of the error.

“We are updating the records as a priority and will write to customers again when it is resolved, which is expected in the next few weeks.”

The bank’s correspondence continued: “As we were aware of this error, we did not submit the mortgage details to the CCR for February and March while it is being fixed.

“This was to prevent incorrect credit information being reflected on the customers’ credit report.

“This means that from February 2023 there is a temporary gap monthly in performance updates to your CCR record.

“Fixing this issue is a matter of priority to us. We’ll write to you to confirm when it’s been resolved.

“We do not believe this error is likely to have affected you.

“However, it does mean that if you did apply for a loan or another form of credit, the gap in the monthly updates to the CCR may have been seen by a lender.

“If you’ve had a credit application refused since February 2023 and feel that this gap may have affected the lender’s decision, you can contact the lender to inform them that your credit information on the CCR is not up to date and is in the process of being corrected by BOI.’

Brendan Burgess, of Askaboutmoney.com, does not believe it will cause future problems for customers or affect their credit rating.

He said: “If anybody is applying for a loan they should check the Central Credit Register. It’s free and it’s easy to do.” And he added: “If you applied to switch from Bank of Ireland to AIB, I think AIB will be well aware of this issue. They’re not going to say, ‘Why did you miss the last three payments?’ I think it’s one of these things that happens.”

He continued: “The technology in transferring something from one bank to another system is very complicated.

“The Bank of Ireland systems are very poor overall but I really doubt if anyone is going to be badly affected by it. They bought 70,000 mortgages and messed up on 35,000 of them but I don’t think that anybody needs to worry about them and the Central Bank would be on top of that.”

Bank of Ireland completed the acquisition of a number of loan assets from KBC in a deal valued at approximately €6.4bn back in February.