Ombudsman rejects complaint on AIB simple interest issue

[Brendan Burgess]

The Ombudsman has published a decision on this issue and has upheld AIB's decision to pay simple interest.

I have no idea how well the complainant argued the case.

I attach the decision and will study it in detail later.

Brendan

 

[Greenbean]

A bit disappointing but there was always the risk the ombudsman would regard the 12% write down and ( simple ) interest refund as a sufficient penalty for AIB .

Considering where we started from - with AIB saying move on there's nothing to see here - they might have won the last minor skirmish but AIB lost the war bigtime . A great result was still achieved - kudos again to Brendan and co who kept the battle going .

 

[Megafan]

A bit disappointing but there was always the risk the ombudsman would regard the 12% write down and ( simple ) interest refund as a sufficient penalty for AIB .

Considering where we started from - with AIB saying move on there's nothing to see here - they might have won the last minor skirmish but AIB lost the war bigtime . A great result was still achieved - kudos again to Brendan and co who kept the battle going .

Well said.

The difference the award/write down made in our lives was genuinely huge. It allowed us to trade up, which would have been beyond us pre write down. The 12% was converted into cash when we sold the house which was tangible to us. Its not something we will forget.

 

[rustbucket]

Well said.

The difference the award/write down made in our lives was genuinely huge. It allowed us to trade up, which would have been beyond us pre write down. The 12% was converted into cash when we sold the house which was tangible to us. Its not something we will forget.

+ 1 to that. We were able to pay off a significant chunk of our mortgage (we had moved) as well as all other short term debt.

At the very least however, if enough people have followed up this issue it might result in the ombudsman clarifying what type of interest should be paid in future cases.

 

[Brendan Burgess]

I eventually got around to reading the Ombudsman's decision on this. I attach the three pages with the Ombudsman's reasoning.

It seems to me that The Ombudsman asked AIB

1) What interest was charged?

2) What interest would have been charged if there had been a 12% write down.

AIB gave him the figures and he accepted them.

But I am guessing that AIB calculated what the interest would have been as follows

1) They took the balance after the 12% reduction.
2) They worked out what the revised repayments would be
3)They worked out what interest would have been charged.

This is clearly wrong. They should have used the actual repayments, not the notional repayments.

If anyone else who has a complaint with the Ombudsman on this issue gets a letter from AIB with the answers to these questions, please send me a copy of it before replying. And if you get a Preliminary Decision from the Ombudsman, let me know.

I am guessing that AIB has misled the Ombudsman here and it's important that the Ombudsman knows this.

Brendan