AIB undercharging on mortgage...

alq

Registered User
Messages
8
...yes, you heard me correctly, undercharging :rolleyes:

Received a letter from AIB this morning to say that, during our 12 month discounted tracker period, they had failed to adjust our payments in line with increases in the ECB rate. As a result we now owe them just over €1200 which they have now added to the balance of our mortgage (having first refunded roughly €50 to us to make up for interest already charged?).

My questions are these:
- Am I right to assume that this undercharged amount will have to paid, despite the mistake being on the part of AIB?

- Would there be any real and tangible benefit in paying the undercharged amount in a single payment, rather than over the course of the mortgage? I understand that it is not a huge amount but it would be a pinch for us as the moment with various bills and a wedding planned for early next year!

I'd appreciate your advice.
 
I too recieved said letter from AIB. Amounts are similar to OPs. Firstly, they should not have made the mistake. Secondly, they offer 2 choices. One, pay the amount owing in 1 lump sum before 31st July 2008. Two, pay the amount over the term of the mortgage which means that the consumer pays for their mistake plus interest charged over the remainder of their mortgage. Words fail me. Have tried calling but on hold forever.
 
If you don't like it then complain (in writing) to AIB. If you still don't like it then complain to the [broken link removed]. Maybe contact [broken link removed] while you're at it but don't expect them to do much (based on my experience).
 
I agree with 16024. I see no reason why any customer should have to pay interest on a bank's mistake. For customer service reasons alone, this amount should be set aside and dealt with separately to the mortgage balance. A rough calculation of 5% over 20 years shows a total repayment incl interest of €1900.
You could also be pedantic and ask them if they will pay the increased mortgage protection to cover the additional balance amount. But then again that's just being cheeky!
Write a letter and complain as Clubman said.
 
So, they are going to charge you interest on the interest. Seems fair to me ;)

Tell them you want a 0% loan over 12 months and will repay it in instalments of €100 per month or you will take the matter to the relevant authorities.

Worth a try...
 
Many thanks for your replies.

16024, I can understand why you are annoyed. This hasn't exactly been a shining example of customer service on AIB's part (but then they blotted that copybook a long time ago).

Having said that, I do feel a certain amount of personal responsibility as I should have noticed that they were undercharging and I would normally never trust a bank or any financial institution to be correct in all their dealings and calculations. I intend to pay the undercharged amount to AIB but in a manner that I can afford and which won't result in us being overcharged. Haven't yet managed to get through to AIB to discuss this though!

Thanks again.
 
if you owe the money and should have been paying a certain amount then its clear you should honour your debt. if you walked out of a shop having underpaid you are either the type of person who feels 'i got away with it' or you are the type who walks back in. hopefully you'll just be honest and pay what you owe, going to the ombudsman or the regulator won't fix this.
 
I got the the exact same letter on wed.1600 owed. To make it worse, the telephone number they give you to ring is no longer in use. Hence they don't even give you a number to even ring. So, if you dont contact them within four weeks, even though the number is incorrect, you start paying interest for their mistake!! No doubt they are now sending a new letter with the correct number. I rang them today, and was offered a loan for the amount, which I rejected, so the issue is still unresolved. Why should we pay for their mistakes? The letter they sent was very generic, so there must be a lot of people affected, i guess. AIB let the big boys (Charlie Haughey) off with millions, but shaft the small fry.
 
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It's within the power of AIB to make some kind of gesture here to the affected customers. They won't do this unless you kick up a fuss. For best effect I would telephone my branch manager, repeatedly, and look for something. First off I'd look for it to be written off - they might not do this but if you make enough noise I'd say they will do something.
 
I rang them today, and was offered an interest free loan for the amount, which I rejected
This is not a pleasant thing to have happen to anyone.
However, getting offered an interest free loan does not seem to be an unreasonable gesture,as regardless, the money is owed, and needs to be paid.
I have to say though, I would also do exactly as Vanilla said, and see if you can get a gesture of good will off the bank by creating a fuss.
Nicola
 
First of all, I am a shareholder in AIB, in case anyone thinks this influences my views.

Secondly, it's completely unacceptable that when an issue creates concern that they cannot manage to provide a phone number where people can get information immediately without having to hold.

Now to the core issue...

Forget the fact that it was a mortgage for the moment. Let's say it was your ESB bill. They would write to you saying that you had been undercharged by €1200 and please pay up. You would have had the benefit of the money for the past 12 months so you gained from their mistake. They would not give you a long term loan, but they probably would give you 12 months to pay it.

Now look at the actual case. It is a mortgage. You have benefited from their mistake in that you have had more money. You owe them €1,200. They are not profiting from your mistake at all. They have lost out.

What if it was an overcharge? AIB refunded all their overcharges with interest. Presumably they are not charging you interest to date on the undercharge?

Let's be clear about this. Everyone of us makes mistakes. Every company we are employed by makes mistakes. If a customer forgets to invoice me for a few months, should I refuse to pay it?

I think Buttermilk's suggestion is a fair compromise:

Tell them you want a 0% loan over 12 months and will repay it in instalments of €100 per month or you will take the matter to the relevant authorities.

And, if you are still not happy, you can do as ClubMan says and go to the Ombudsman who will offer a completely independent assessment of the issue.

Brendan
 
I would just add that telephone conversations are not worth the paper they're written on so please folks, make sure and write to the banks customer services to complain and try to resolve the issue. As stated previously it may take a few letters to reach an amicable solution so be prepared for this. Also I find writing a letter and given time to assess what you would like to say is a lot easier than being sprung a surprise question over the phone and not having a decent answer.
 
Got the same letter myself.Though I spotted this myself last year when it happened.I rang them then and they said it was their error for not updating systems and that they would not be seeking the additional money.
Then a letter over a year later asking for the money. What a bunch......
 
Agree it was badly managed but mistakes happen. I wonder if people were overcharged would they expect a refund?
 
All,

I was also on a introductory rate with AIB and did notice back in November 2007 that they had raised the repayment (twice). I had to chase them for 3 months before in February 2008, they sent a letter explaining what they had done (or not done).

I have escalated this issue to the finacial regulator and the ombudsman and the issue is still pending. It is interesting that they have taken this long to tell everyone else.
 
Anyone still querying

Was promised a letter explaing in ladybird english the facts and figures for their errors last month. Still no letter received. Is anyone still chasing this up with AIB or am I on my own?
 
You could always make a formal complaint and take it as far as IFSRA or the Financial Services Ombudsman if necessary.
 
This happened to us last year with NIB over 3 months when they didn't update the repayment after an ECB rate rise. When I mentioned it they said it was a system error on their part and so were not back charging their customers. Obviously I was pleased with that response although I had expected to pay it.

However just last month I received a letter telling me that the ECB rate had gone up so my payment had actually gone down by the .25% amount rather than up ?! Thinking it was just a typo I let it go, but the payment they took was indeed the lesser amount....0.5% below what we should be paying ! So although I naturally like the idea of getting away with this, I have rung NIB to let them know of their error.

Anyway, AIB are not isolated in this type of mistake and perhaps you could ask for some discount as a gesture of good will. Although as someone who is very quick to complain when I am over charged, I probably wouldn't have the neck to look for that ! In fact I think an offer of an interest free loan is actually pretty good, maybe I'm too nice !

R-
 
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