AIB AIB has accepted the Ombudsman's decision and will be rolling it out to 5,900 impacted customers

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Brendan Burgess

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Hi folks

Sorry for the radio silence on this topic. There were two good reasons for it.
  1. The Ombudsman had insisted to both AIB and to us that the process was confidential until the deadline for AIB to appeal the decision had passed
  2. We were winning this war and we did not want to do anything which might provoke AIB into appealing the decision to the High Court
The Ombudsman issued their preliminary decision on 17th January
AIB made their stock market announcement on 4 February
The Ombudsman confirmed their preliminary decision on 12 March
Both sides had 35 days to appeal the decision to the High Court
We indicated immediately that we were not appealing the decision
AIB paid the redress to Karen on Day 35.

They issued this statement on their website yesterday afternoon:


In early February we announced that we had made an additional provision, primarily in relation to an FSPO decision on an individual case relating to a tracker complaint which was then at a preliminary stage. This case is now concluded with the FSPO. While this case involved a number of complex issues the Bank has decided to accept the finding in full, and to apply the finding to other customers within the same cohort. Customers do not need to take any action and will receive a letter and their payments in July and August.
 
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Brendan Burgess

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AIB is applying the finding to other customers in the same cohort.

The Ombudsman insists that only he can publish the decision.

But this is a summary of what he found.

AIB did breach the contract and should have offered a tracker mortgage to Karen.
AIB was wrong to say what the rate would have been - their report could, at best, conclude what it should have been.
He could not decide what the rate would have been either.
He felt that, under the circumstances, it would be unfair to AIB to give Karen a tracker for the remainder of her mortgage.

As a fair balance, he ordered AIB to write down the balance of Karen's mortgage by 12% of the balance on the day she rolled off the fixed rate and should have been offered a tracker in 2010.

And to pay her, into her nominated account, the interest charged on that write off since 2010. That amounted to roughly a further 4% of the balance as of October 2010.
 

Brendan Burgess

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So what does this mean for the other impacted customers?

Assuming that they implement the Ombudsman's decision as given.

If you had a mortgage balance of €200k when your fixed rate ended, your mortgage balance today will be written down by €24k.

In addition, you will get a cash payment of around €8k. This would depend on a few factors. If your fixed rate ended before 2010, it will be a bit more. If it ended after 2010, it will be a bit less.

So total redress on a €200k mortgage will be around €32k.
 

Brendan Burgess

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How much would Karen have got if the Ombudsman had ordered AIB to implement the Central Bank redress scheme?

We had argued that there was a prevailing rate and it was 1.5%.
If the Ombudsman had ordered AIB to implement that, and give 15% compensation for stress, then Karen would have got about 20% of her mortgage balance instead of 14% and that she would also have her tracker now at 1.5%,
 

Marie Meehan

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Fantastic result. Thank you for everything Brendan. Am I correct in reading this that Karen hasn't been put back on tracker rate ?
 

Brendan Burgess

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Correct. She will not be on a tracker.

That is disappointing but not as big an issue as it was.

We had said that she should get a tracker at 1.5% . But since our campaign started, mortgage rates generally have come down and now people can switch to Ulster Bank and KBC at 2.2%.

Or if she really wants to stay with AIB, now that her LTV is reduced, she can avail of a lower variable mortgage rate. :)

And, of course, for anyone who has already traded up or who wants to trade up, getting a tracker at 1.5% would not be an advantage.

Brendan
 

AnitaF

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Fantastic news, thank you so much for your tireless campaigning on our behalf Brendan.
 

Brendan Burgess

Founder
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Charlie Weston, who has given our campaign great support from the very start, covers it in today's Indo.


I need to clarify one point in the article.

The Ombudsman did not direct AIB to give Karen a tracker.

The AIB statement says that they will "apply the findings". If they apply the redress ordered by the Ombudsman, they will not put people back on trackers.

Of course, the Central Bank could insist that AIB apply the Central Bank redress scheme to those impacted which would go further than the Ombudsman ruled.
 
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blue_steel

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Correct. She will not be on a tracker.

That is disappointing but not as big an issue as it was.

We had said that she should get a tracker at 1.5% . But since our campaign started, mortgage rates generally have come down and now people can switch to Ulster Bank and KBC at 2.2%.

Or if she really wants to stay with AIB, now that her LTV is reduced, she can avail of a lower variable mortgage rate. :)

And, of course, for anyone who has already traded up or who wants to trade up, getting a tracker at 1.5% would not be an advantage.

Brendan
Fair enough. The reduction in capital will of course reduce repayments going forward as well. AIB themselves have a 2.55% fixed rate which we had held off moving to while this way all still up in the air. Not being put onto a tracker going forward feels like AIB have not really conceded the argument but it is still a huge victory considering where we started from.
 

Pearl

Registered User
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Thanks so much for your tenacity, Brendan. Is there a link where we can make a donation to this website, or some other way we can "give a bit back" to you and the invaluable resource that is this website?

So do I understand correctly that most of the compensation is in form of mortgage write-off as opposed to a cash payment? In 2010, my mortgage balance was about 320K.

Thanks,

Pearl
 

dublin - 1

Registered User
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Thanks so much for this Brendan, is Charlie incorrect here in the article stating that we will be put back on a tracker?
 

Jean84

Frequent Poster
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Thanks a mil again Brendan for all of your hard work and also all of the others that fought so hard over the years on this decision!
Pearl I would imagine they would have to give an option how you want the funds as some have already paid back the mortgages in question (me included as we sold the house)
 

Summercruising

Registered User
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Fair enough. The reduction in capital will of course reduce repayments going forward as well. AIB themselves have a 2.55% fixed rate which we had held off moving to while this way all still up in the air. Not being put onto a tracker going forward feels like AIB have not really conceded the argument but it is still a huge victory considering where we started from.
From reading article it suggests people will be put back in tracker?
 

Brendan Burgess

Founder
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41,052
From reading article it suggests people will be put back in tracker?
Sorry folks, I had not notice that.

I have edited that post to clarify as follows:

I need to clarify one point in the article.

The Ombudsman did not direct AIB to give Karen a tracker.

The AIB statement says that they will "apply the findings". If they apply the redress ordered by the Ombudsman, they will not put people back on trackers.

Of course, the Central Bank could insist that AIB apply the Central Bank redress scheme to those impacted which would go further than the Ombudsman ruled.
 

Tdress2020

Registered User
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Great news.
The Ombudsman found that AIB breached the contract.
A little bit disappointed that Mr Deering said that it would be unfair to AIB if Karen got a tracker back.
Would Mr Deering be saying that if he had to adjudicate on 5900 customer complaints, each with their own personal stories, on not being able to send their kids to dance lesson or how you lost your only chance to become a parent because of what AIB.
I hope someone with money out there bring a case through the courts & wins..
 

Summercruising

Registered User
Messages
16
Thanks so much for your tenacity, Brendan. Is there a link where we can make a donation to this website, or some other way we can "give a bit back" to you and the invaluable resource that is this website?

So do I understand correctly that most of the compensation is in form of mortgage write-off as opposed to a cash payment? In 2010, my mortgage balance was about 320K.

Thanks,

Pearl
Totally agree Pearl - he has been a stalwart and should be acknowledged in some way
 

reggie3234

Registered User
Messages
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Yep fair play Brendan, this is a really great result. First time reading no tracker back bit was sting but then you relaise this is a huge victory. From the stone wall no from the bank 10 years ago to here takes huge perserviance and guts from a small cohort lead by Brendan, I didnt even know I was part of the review I got the letter in 2018. Others worked away tirelessly on this for years before that. Thank you Brendan.
 

KurtKasino

Registered User
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Great result, thanks so much Brendan for your tireless work. I think the decision on the rate seems like a balanced one to me, also AIB would surely have been more likely to appeal if it had gone the other way. Overall a satisfying outcome and we can all move on.
 
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