Ulster Bank's proposal to deal with offset mortgages

[Keninf]

In a way yeah. 100k mortgage 50K offset. 10 years left, or however long

They worked out how much interest you'd of saved on the 50k offset at about 4% n the doubled that.

Same if you had 5k, or 10k or what ever in the offset. That's the figure they started with

 

[Keninf]

But worked it out for the remainder of your term not what was gone

 

[Doni666]

So just for my own clarification, they are using past offsetting balance to predict future interest saving

 

[aoraki]

So just for my own clarification, they are using past offsetting balance to predict future interest saving

Yes. They look at your average offsetting balance over two different periods. 1) The last 6 years and 2) the last 2 years. They pick whatever is the higher of the two.

 

[aoraki]

UB made a decision and offered us an ex gratia goodwill payment which we had to accept. They also stated this didn't affect our right to complain.

I'm not saying that any of us should have to repay this payment as it's not compensation but a goodwill gesture .

What I am saying is that if you read the FA contract it does state that as long as you have an offset mortgage you must have an offset arrangement.

I do believe there are very serious grounds for any offset customer to hold UB to a breach of contract and if we could retain the status quo with our offset and keep the goodwill gesture and have the best of both worlds. For example in UBs response letter to my complaint they basically reiterate their ability to close the offset using the same clauses in the contract as they quote on their website. One that they quote is :

Section A - 8 (d)(1) From time to time, we [the bank] may decide in our absolute discretion that a particular product or account is no longer eligible for inclusion in an offset arrangement.”

My response to this is :

This clause allows you [the bank] the discretion to remove a particular product or account. Singular. Not to completely close and end in totality my offset flexible arrangement. Also in the Unfair Terms in contracts a term that is always considered unfair is “ A term that gives business the exclusive right to decide that goods/services conform to the contract.

For what it’s worth Doni666 I think you have a point around the wording of their T&Cs with regards to the “Offsetting Arrangement” and they seem to make the distinction between that and the accounts that go into the arrangement. I noticed that myself when I had a closer look at the T&Cs a few months ago. There is a big difference between making certain account types ineligible for inclusion in an offset and removing the offset arrangement entirely! If they were so sure that the wording of the T&Cs were ironclad and beyond challenge they would just remove the offset feature and be gone, they certainly wouldn’t be paying €58 million to people as “goodwill” payments. Why would they need to care about goodwill if they are no longer in the jurisdiction? So I think UB know themselves that they are on somewhat shaky ground here.

But the problem is that I’m not a contract lawyer. I also think myself that they are in bed with the authorities when it comes to this solution, and that it was probably formulated with the Central Bank’s help and guidance. So I think challenging this would be difficult. But maybe I’m just lazy. Plus as Monbretia said, a lot of folks are quite happy with the payment, so it’s not like the tracker scandal situation where you had a large cohort of people who think they got completely shafted and acted accordingly.

I think Ulster Bank have played this well and they’ll probably get away with it.

 

[Doni666]

I disagree aoraki that they've played it well. There are lots of holes in their reasoning. I'll show you later when I post up their reply and mine.

I do agree with you about them paying this goodwill payment and being on shaky ground. UB fought the tracker cases against the FSPO decision. Now they're paying out €58 million in goodwill? Really!

Regardless whether people are happy or not, all it takes is a few letters and people may get more. A few hours writing complaints and responding to replies. We Irish aren't good at complaining.

We have in our arsenal unfair terms in contracts, breaching their own contract, frustration of contract and the contra proferentem doctrine. Plus we are consumers.

I do also agree that the central bank is fully aware of the situation of course but I want to know for definite if they approved of it . Am awaiting their response.

 

[Keninf]

How they have worked out the compensation could be considered generous. The doubling, the fact they are compensating since last August when offsetting is not ending till May. 10 extra months, I know of one case where someone got compensated even though their mortgage was redeemed before offsetting ended.

A lot miss out due to their own history and how they had used the offset. And when not forewarned that is hard to swallow. I wonder how anyone has got on that could prove future intent to offset??

I get for you Doni that it's not about that but if UB could do it at all. It seems they can. Be very interesting to see if central bank come back of if ombudsman will even go near this. Of if they too where informed. Government will do nothing, even if a large shareholder in AIB, we have seen that they are powerless to force the banks to do anything.

It all comes down to point of law but I believe UB are confident on that. Or they would not have paid out 58 million until everything was finalised.

 

[aoraki]

How they have worked out the compensation could be considered generous. The doubling, the fact they are compensating since last August when offsetting is not ending till May. 10 extra months, I know of one case where someone got compensated even though their mortgage was redeemed before offsetting ended.

A lot miss out due to their own history and how they had used the offset. And when not forewarned that is hard to swallow. I wonder how anyone has got on that could prove future intent to offset??

I get for you Doni that it's not about that but if UB could do it at all. It seems they can. Be very interesting to see if central bank come back of if ombudsman will even go near this. Of if they too where informed. Government will do nothing, even if a large shareholder in AIB, we have seen that they are powerless to force the banks to do anything.

It all comes down to point of law but I believe UB are confident on that. Or they would not have paid out 58 million until everything was finalised.

There has been nothing but tumbleweed from the Central Bank regarding this move, I haven’t seen anything from them saying that they are looking into it, checking the legitimacy of it or anything like that.

 

[Keninf]

There has been nothing but tumbleweed from the Central Bank regarding this move, I haven’t seen anything from them saying that they are looking into it, checking the legitimacy of it or anything like that.

Yeah but they seemed to be involved at every other step of UB and KBC withdrawl "for the consumer". Hard to believe they would not of been aware here too.

 

[Doni666]

So my initial complaint was just a short letter stating that I was most unhappy with the solution being implemented to deal with the offset flexible mortgages and I don't believe they had the right to do so. Also in doing so w

ould be a frustration of the original agreement with First Active. Their response is attached

 

[Doni666]

My response. I'm not by any means an expert in legal financial or contract law. Just annoyed!

 

[aoraki]

Yeah but they seemed to be involved at every other step of UB and KBC withdrawl "for the consumer". Hard to believe they would not of been aware here too.

It’s difficult not to draw certain conclusions from their complete silence on this matter so far.

Nice to know who’s back they have.

 

[Keninf]

A lot of detail in there Doni. But can only see them coming back with the same response. Which their legal would have wrote before this was even announced.

What's the next step?

 

[Doni666]

A lot of detail in there Doni. But can only see them coming back with the same response. Which their legal would have wrote before this was even announced.

What's the next step?

Waiting on a final response from them and then FSPO. I don't expect them to say any different in their final response. UB will fight every step of the way until FSPO gives a preliminary decision.

As they say Keninf, the devil is in the detail, I don't think UBs legal case is nearly as strong as they maintain. I actually think they're chancers to be honest.

 

[Doni666]

I'm mulling about the thought of a possible injunction against them but will see what the expected cost of that is next week!

 

[Keninf]

I'm mulling about the thought of a possible injunction against them but will see what the expected cost of that is next week!

Yeah that what I was asking really. And could be what they are banking on. Is the cost of legal to you greater than the loss of benefits.

Legal is for the wealthy.

 

[Doni666]

Regulator wont act until there's a complaint. Central Bank on the other hand well...but if you're that pissed off about it, then challenge it Use my response if you want. The more that challenge it the better.

 

[Doni666]

Don't be so defeatist guys! David v Goliath.

 

[Target106]

Don't be so defeatist guys! David v Goliath.

Best of luck, it will be interesting to see how this goes!

 

[Getplanning]

Don't be so defeatist guys! David v Goliath.

I'm with you on this. It's all smoke and mirrors with UB. I sent formal complaint, got a final response, badly worded response, incorrect details etc. They are covering things up on these mortgages. I'll be submitting a complaint to the ombudsman. FA originally sold us these mortgages, UB took them over but they were sloppy with their paperwork, T&Cs etc.