AIB AIB 3.67% customers to get €1000 each

Brendan Burgess

Brendan Burgess

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but that is all

3. Contractual option of a prevailing rate – customers never on a tracker

· Following ongoing review, AIB has decided that approximately 4,000 customers who were never on a tracker rate will be paid compensation. These customers had the contractual option to choose a prevailing tracker rate at the end of their fixed rate period. However between October 2008 and December 2013, AIB had withdrawn the prevailing tracker rate and as such these customers were not provided with this choice.

● AIB will pay each of these customers compensation of €1,000 plus €615 towards independent advice. They will also have the option for a 12 month period to avail of the bank’s current prevailing tracker rate on a go forward basis and the right to appeal through the independent appeals process.

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Update
I asked AIB what their prevailing rates were today and got this response:

"It is 3.32% for PDH customers and 4.32% for BTL customers."
 
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Yes we should see this as encouraging sign, but can’t rest on laurels. Our efforts need to be increased.

If public attention starts to drift or the public think what we received is fair then AIB will just roll over “The 4000” - we need the public to see this offering from AIB is a smokescreen.

The wording of the AIB press release would suggest they were / are not obliged to reviews these cases. That they decided of their own free will to offer compensation and a tracker back.

For the average person not involved in this, by reading this statement it would be easy to think AIB are going above what they have to....


Would have been nice if AIB had put up a comparison of what their current tracker rate is against what it was in 2008. That way the general public could see what AIB is offering is not a tracker in the spirit of what was contracted back When mortgage was drawn down.
 
Agreed let's keep up the pressure as this ridiculous offer of €1000 + €615 for independent advice is not acceptable. Let's get onto pk for advices
 
The only change for this group is:

€1,615 cash

They have a right to appeal to the Independent Appeals Panel.

Up to now, AIB said that they were not affected.

Brendan
 
We must come together and keep the pressure on in the new year. I'd be interested to know what Padraic Kissane thinks of this paltry offer!
 
Brendan Burgess said:
These customers had the contractual option to choose a prevailing tracker rate at the end of their fixed rate period. However between October 2008 and December 2013, AIB had withdrawn the prevailing tracker rate and as such these customers were not provided with this choice.
Click to expand...

Appears to me that AIB are not addressing the issue of the "prevailing rate" at the end of a fixed rate period.

AIB's statement back in October 2008 stated "AIB today announces that it will no longer offer Tracker Mortgages to new mortgage applicants, effective from close of business today, Friday 10th October 2008."

On one hand we are being treated as "existing" customers in terms of our contract, but "new mortgage applicants" when it comes to determining the prevailing rate.
 
Despite what AIB told everyone, I have recently discovered that we all have enduring options "within the terms of our loan agreement".

The only way after drawdown "for the Bank to adjust margin upwards" defined under the contract is if the prevailing margin is higher before drawdown.

If a customer got option of availing after drawdown they did need to confirm LTV appropriate margin as this is already defined in the contract.

Also cannot switch from one margin to another to get lower prevailing margin, ie then that at drawdown if it's not defined in Part 1.

How can it be tolerated that AIB can cherry pick different bits of the contract to suit them and "alter" the margin after drawdown without defining this mechanism in the contract.

This was AIB'S mistake to market and sell they way they did, wrecklessly fuelling house price inflation with these "promises" of good value loans in the future compared to historical offerings.

Nobody should accept any offer from bank as to do so would be altering terms of agreement.

It should be appealed without accepting or signing anything with AIB and then the courts if unsuccessful to finally give people their contractual entitlements and what they were led to believe was available for the lifetime of the loan
 
In this cohort (not been confirmed yet). Disappointed, but not surprised by the continued attitude of AIB.

If you read through the Central Bank statement (link on Twitter feed to a handy PDF near top of statement) it does not count the 4000 identified as due any different treatment to any other impacted customers.

We are actually listed in one of the case studies and lender is supposed to pay back money overpaid and compensation for distress caused. So, we should be treated the same as all other cohorts. Share price is all that matters to them now.

I wonder if CB knew AIB were going to pull this fast one in their statement? Even BoI did not try to pull this nonsense?

I will fight this all the way, but I sincerely hope we don't have to.
 
Ninibopp said:
Regarding the so called prevailing rate:-

https://en.m.wikipedia.org/wiki/Contra_proferentem
Click to expand...

Good point.

AIB's position on prevailing rates has huge holes in it. They claim not to have offered a prevailing rate tracker from 2008 onwards because they took tracker mortgage off the market. Problem for them is there was a tracker rate in place during those years.

The recent offers of 3.67 or 3.32% as a prevailing rate tracker is contradictory as it is not being offered to anyone else.

Those letters offering the above rates have possible implications 're statute of limitations. AIB have obviously weighed up the cost to compensate 4000 customers and thought it's worth the risk of someone litigating this.
 
My view on it is the prevailing rate is the ecb rate which continually fluctuates. I.e @ 0% now. The margin is a completely separate matter. AIB are trying to mask the margin element as the prevailing ecb rate.
 
"prevailing margin" is described in contract.

Clause 3.6.3(b) states that “the customer may not convert the tracker interest rate directly or indirectly to another tracker interest rate in order to avail of a lower prevailing tracker margin”.

As customer can't go tracker to tracker (directly) or tracker to fixed to tracker (indirectly) to avail of lower prevailing margin, then the margin is drawdown margin. In these standardised contracts should apply to all customers, as part 1 is just what customer starts on.
 
Those of you affected need to get together and put real pressure on AIB and the Central Bank.

Look at the impact of the 4 people who went to the Oireachtas Finance Committee. You have a much easier case to explain.

First, you all should appeal it to the AIB Independent Appeals Panel. This costs you nothing and even if you lose, it does not affect anything.

If you get no success then you need to pool your compensation and get Counsel's opinion on what the word "prevailing" means.

In the meantime, one of your number, could take a case to the FSO to see what they think.

Brendan
 
What is the next step for those of us in this prevailing rate scenario? Do we hold off and see if the central bank forces AIB into doing the right thing or do we go down the FSO route. My file is with Padraic Kissane but they are under severe pressure at the moment so I'm not getting much info from them. That is not a criticism in any way.
 
The only way to put pressure on AIB is for a large number to take either a case to FSO or legal action.

Having assisted people in past with PTSB independent appeal panel I would not hold out much hope it assisting AIB customers (different panel I know but the similarities as to how banks have dealt with these issues is incredible). Going down the independent appeal process could actually prejudice other options. The statute of limitations could be argued by AIB, anyone who had a fixed rate expire in 2012 ought to be careful as the six year limitation period for claims arising from this arguably is running out.

A central bank lead restitution process would be much more desirable for customers as it is more likely to be back dated to 2008. But the bank seem to be digging their heals on this so far.
 
Hi bungaro, following your thread as understand im in this group too.
Thanks
Can you pm me please , what or how so I send my details??? Not familiar with how this works, sorry...be grateful for any help
 
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Hi there. Think I could be in this group also. Got offered the 3.67% at the end of my fixed rate. Could I join too bungaroo? Don't know how to private msg as just new here. Long time watcher though
 
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