Key Post Did you lose your Ulster Bank/First Active tracker after your fixed term?

Your mortgage contract with Ulster Bank or First Active contained a clause which said you would be entitled to a tracker rate when the fixed term expired.

However, UB stopped doing trackers so they stopped offering customers this option when the fixed term expired.

You must insist on getting it back and you will generally get it back.

Charlie Weston reports in the Irish Independent that two brokers have got trackers back for their customers ( Kissane Financial Services got trackers back for 13 customers, while myadviser.ie got trackers back for two customers)

Ladylouth got hers back without going to the Ombudsman - although she had to threaten

Askaboutmoney user peteb got his tracker back but had to complain to the Financial Ombudsman

Askaboutmoney user sampeckinpah is in the process of going through the Ombudsman

Brendan

I have spoken to Padraig Kissane.

He has taken 11 cases against Ulster Bank to the Ombudsman and the Ombudsman has upheld all 11 complaints. The borrowers were put back on their trackers and were given a refund of the overcharge since the fixed rate expired.

He has taken two other cases against UB, which they settled without needing to go to the Ombudsman.

Padraig will meet you and look at the following 3 documents

1. The original mortgage/loan offer
2. The rate change authority when you fixed
3. The options letter you received when your fixed rate expired

He does not charge for the first short meeting where he will tell you if you have a case or not.

He charges €600 for taking a complaint on your behalf.

If you get a refund, he charges 15% of the refund.



His contact details are [email protected] and 01 205 1305. His website is "under construction".



Since the Indo article he has been contacted by clients of most of the other financial institutions.



I think that it's probably worth paying for this service. The Ombudsman assesses each case from scratch - they don't go on precedent. While each case is different, there are hurdles to be overcome. Someone who has successfully taken a number of different cases is more likely to succeed than someone taking a case for the first time.


Of course, all of this should be unnecessary. UB should simply review all cases which came out of the fixed rate which were entitled to trackers and put them back on trackers.


Failing UB doing it on their own initiative, the Central Bank should tell them to do so.

I have total and absolute sympathy for all those people who have been miss sold another type of mortgage when they should have been offered a tracker. Surely the Central Bank and or the Financial Regulator have some powers to intervene in this. I would imagine that what we are hearing and reading about this problem is only the tip of the iceberg. It is surely possible to order all the institutions to do an audit of all the mortgages on their books that fit into the category of "could be entitled to a tracker but were not offered it" and then have an outside independent audit to spot check the results unannounced with massive fines imposed where the institution has not complied.

I am not aware of any First Active mortgages that transferred from tracker to fixed and were not entitled to revert back to tracker after the fixed rate was up.

There seems to be a common perception that when lenders offered a fixed rate it was with the express intention of slyly doing someone out of their entitlement to a tracker, well it wasn't always the reason, the main reason for trying to encourage fixing was to stop mortgage switching. Mortgages were being pinched left right and centre by banks from one another, if customer fixed then they could not get out without paying a penalty, it tied the customer to the bank for the fixed term.

Anyone who had a First Active tracker and subsequently fixed should most definitely check their documentation, in my opinion all these accounts should have reverted automatically to tracker but it does seem this was not happening, this would have required deliberate adjusting of the maturity instructions at some stage, however I do know several customers who did just revert to tracker so it is hard to see a pattern.

wbbs said:

the main reason for trying to encourage fixing was to stop mortgage switching. Mortgages were being pinched left right and centre by banks from one another, if customer fixed then they could not get out without paying a penalty, it tied the customer to the bank for the fixed term.

Click to expand...

Hi wbbs

That is very interesting. I had not thought of that before and it makes definite sense.

UB has argued in some cases that it was not their policy to proactively contact customers to get them to fix. I have seen reports of a few cases where people were contacted by First Active. Do you have any views on or experience of that?

I can't speak about UB but I don't see why it would be any different to FA as both were being run the same way in later years, FA certainly actively encouraged people to switch at various times to fixed or sometimes to trackers. There was a major push at one stage to get customers to switch from standard variable to tracker and strange as it may seem now with the benefit of hindsight a lot of customers did not avail of it then as they felt there was some catch to it.

Fixed rate offerings were often made to customers on variable or tracker rates and as I previously said the reason was to tie them to the lender, not to get them off their existing rate. The benefit to the bank was they had a captive customer for a few years and did not have to worry about retaining that business, the fixed margin then allowed them to offer matching savings products taking into account the fixed income flow from the mortgages. Also it sometimes suited the customer to fix, a lot of customers liked the security of a fixed rate, it was their choice and no one had a crystal ball so the decision was theirs in the end. Not everyone lost on a fixed rate, sometimes customers did very well but you only seem to hear the bad stories!

My FA mortgage started off as Fixed for the first two years (late 07 - late 09) and reverted automatically to the tracker, no questiosn asked.

However, it is slightly different than going from tracker to fixed and back to tracker.

My wife had a 5yr fixed rate mortgage from First Active that's up in March 2013.

I got her solicitor to check the mortgage documents and she automatically reverts to a Tracker of ECB + 1.15% once the fixed rate is up.

Rang Ulster Bank to confirm and they did so in writing.

Will save her about €750/month

Hi mannin

That is interesting. Can you reproduce the full wording of the Fixed Rate Authority?

Brendan

manninp2 - That is my understanding of all FA trackers that were switched to fixed, they were to automatically revert to the tracker they started from. Why some have not is a mystery.

The mortgage began as a fixed rate of 4.95% in March 08 for 5 years.

The mortgage agreement clearly stated that pending no other changes that it would automatically revert to ECB + 1.15%.

It even went as far as to show what the payments would be on the tracker, at the time the ECB rate was 3.75%. The payment shown would equal an interest rate of 4.9%