AIB AIB options letter before October 2008

Brendan Burgess

Founder
Messages
37,501
If your fixed rate expired after October 2008 and you got the €1,615 , this thread is of no relevance to you.

I have been looking at the letter sent to borrowers whose fixed rate ended before October 2008. Many people who got this did nothing.



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In my view, this letter is not clear at all. It is designed to confuse people which would only encourage them to do nothing.

For example, it's clear what you do if you want a fixed rate. Just tear off the form and send it back.

But what do you do if you want a tracker? It's not clear to me at all.

Brendan
 
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verywhys

Frequent Poster
Messages
93
More evidence of the sloppy paperwork and practices that were prevalent at the time and AIB are seeking to benefit from now.
Was this the standard options letter being sent out by AIB or were there other letters that were worded differently?
 

carlito

Registered User
Messages
5
Interesting. It basically says on expiry that the rate will auto revert to variable. That after this you may choose a fixed rate and that to avail of a fixed rate on expiry return the form. A list of "sample" rates is provided but it doesn't make it clear that the tracker option is available to all customers receiving the letter. AIB are using this in the appeal reply to say they provided the option but if a tracker was not specified on the original contract, I fail to see how a customer would know that the tracker rates were applicable to them under clause 3.2 or how they were given an option to choose any rate except variable or fixed.
 

Brendan Burgess

Founder
Messages
37,501
Folks
In case it's not clear

This is completely separate from the Prevailing Rate issue.

This only applies to people whose fixed rate expired before October 2008.

I have deleted the off topic posts.

Brendan
 

ciarogs

Registered User
Messages
4
This is my situation. Started with Tracker in 2006. Fixed in 2007 for one year. Received this letter and did nothing through ignorance. In 2009 we requested our Tracker back as rates were diverging. Told not available anymore. Fighting for it back since 2016 with Padraig Kissane but no joy!
 

Brendan Burgess

Founder
Messages
37,501
Hi ciarogs

Very interesting.

Do you have a copy of the letter which was sent to you in 2008 when your fixed rate ended?

And what is the basis for your fight to get it back?

Brendan
 

ciarogs

Registered User
Messages
4
I’ll post it next week- away from home at the moment. Padraig feels that the Tracker was the initial rate attached to the account and should have been available to us when we asked in 2009. In fact should have been the default rate on leaving the Fixed in 2007.
 

carlito

Registered User
Messages
5
I received an identically worded letter in 2007. I took out the mortgage in 2006, the contract was for a variable but I opted to start on a 1 year fixed rate. I switched from this to a fixed rate which expired post 2008 and so was included in the prevailing rate review due to clause 3.2 in the mortgage contract.

I appealed on the prevailing rate issue but in the appeal I though it was worth bringing up the 2007 letter as it did not explicitly provide the option to convert to a Tracker - just revert to Variable with the option to convert to a fixed rate at a later date or to return the form "immediately" to "avail of a fixed rate". As per the letter attached in the first post, tracker rates were included on the list but there was no obvious option to avail of them or that they applied to all customers with clause 3.2 and not just those who had a Tracker specifically mentioned on their original contract.

AIB responded to this in the appeal:

"The Bank wrote to the cusomers on XX/XX/2007, in advance of the end of their Fixed rate on XX/XX/2007, to remind them of the forthcoming end of the Fixed rate and to ask them to select a rate to apply when the Fixed rate period ended. In this letter of XX/XX/2007, the Customers were given the opportunity to select a Tracker rate on XX/XX/2007 but they did not do so. There was therefore no service failure on the part of the bank"

Note the wording regarding "opportunity" to switch rather than "option". I think the bank are being very careful with their words here.

One other item of interest in the letter received AIB in 2007 when we went to a new fixed rate: the letter states “You will be entitled, with the banks prior consent, to withdraw from the fixed interest rate agreement either by repayment in full of the Mortgage Loan and interest accrued to the date of repayment or by conversion to the variable interest rate then prevailing”. Again - no mention of tracker.
 
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Brendan Burgess

Founder
Messages
37,501
Hi Carlito

Their response is interesting.

I think that this will be one for the Ombudsman after the Appeals Panel rejects your appeal.

That options letter is very confusing - either by carelessness or design. But it doesn't really matter which - it's still confusing.

The letter should have said : "To avail of a fixed rate or a tracker rate, please complete the tear-off section..."

The tear-off section covered both

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You could have put in here "Tracker home LTV >80%"

But I understand this language. Most people probably don't.

When I go to renew my health insurance I find the options very confusing. I do a bit of research and then say "OK, I can't decide, I will come back to that later" Then life intervenes and before I know it, my policy has auto-renewed.

I think it's the same here. Many people would be confused by that letter. They would put it to one side with a view to investigating it later or maybe with a view to calling AIB to discuss it. Then life intervenes and they never get back to it. And they have lost their tracker.

It would be worth doing a mock-up of what you think the form should have looked like. I would put the options on the tear-off with a box beside each one to be ticked to select your choice.

Alternatively, it would be worth getting hold of the options letters sent by the other lenders to see if they made it clearer.

That might convince the Ombudsman.

Brendan
 
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verywhys

Frequent Poster
Messages
93
This letter could mean one of two things......the recipients of this letter were only offered a fixed rate or AIB believed the tracker rates to be a form of fixed rate, because of the fixed margin......if the latter is the case, then AIB's attempt to retrospectively increase the tracker margin and the prevailing rate might become even more questionable.
 
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