A big game of whose to blame going on
AIB 'missed warnings' in credit history blunder
By Donal O'Donovan
Friday August 10 2012
AIB did not spot early warnings that should have alerted it to problems in recording the credit history of thousands of customers, it was claimed last night.
It follows news that AIB sent incorrect information about the loan arrears of 12,000 customers to the Irish Credit Bureau (ICB) over a six-year period until the end of July.
The ICB collects the information that most banks and other lenders rely on to decide whether or not to loan money to consumers.
The blunder means that some people may have been incorrectly turned down for loans, including mortgages.
ICB head Seamus O Tighearnaigh told the Irish Independent yesterday that it would have flagged anomalies to the bank.
"There are cases where we reported an anomaly -- such as a borrower going from having no arrears at the start of a month to being four months behind at the end of the month," he said.
The ICB said that when potential issues were picked up by its systems, the cases were referred back to the lender to check and correct.
However, the ICB itself had no powers to alter the data it held about borrowers, Mr O Tighearnaigh said.
The errors at the centre of the controversy happened when customers whose loan repayments are made weekly or fortnightly missed a payment.
When AIB told the ICB about the missed payment, it was recorded as each case being a month in arrears -- instead of customers being a week or two weeks behind on payments.
That meant incorrect credit histories about the affected customers were held by the ICB and circulated to other lenders -- including mortgage lenders and credit card companies.
Mr O Tighearnaigh admitted that in most cases the information from AIB did not raise any alarms at the Credit Bureau. It meant the greater problem went undiscovered for years.
In fact, only when individual customers questioned their personal records did the issue came to light.
And last night, AIB insisted it was never given a "trigger" from the ICB, warning about inaccurate data.
"There was no trigger from the ICB on this issue that would have drawn AIB's attention to it. This issue was first brought to AIB's attention by a customer, after which we undertook a detailed review," a spokeswoman said last night.
AIB said that once it became aware of the problem in May, it informed the ICB and the Data Protection Commissioner -- which oversees all bodies that hold people's personal records.
The Data Protection Commissioner is planning a wider probe into the supply of sensitive personal information to the ICB as a result of the case.
A spokeswoman for the commissioner said it would launch a wider investigation, including auditing data supplied to the ICB by a number of banks and credit unions, to ensure no similar issues were occurring elsewhere.
AIB said it would pay for a new credit report for any customer affected, but stopped short of committing to compensate anyone who may have been refused a loan because of the error.
Anyone affected by the problems at AIB can register a complaint with the Data Protection Commissioner.
The commissioner has no role in dealing with compensation claims, but under Data Protection legislation a person who suffers damage through the mishandling of personal information may be entitled to claim compensation through the courts.
Mr O Tighearnaigh said he believed no other lenders had made the same mistake as AIB.
- Donal O'Donovan http://www.independent.ie/business/iris ... 95909.html