AIB AIB, tracker rate in contract, fixed - not getting my tracker back.

M

mister32

Guest
I was on tracker and fixed for 3 years.
At the end of which I was not returned to tracker.
I asked to be put back on tracker even before the end of the fixed rate period.
I'd say there are thousands like me.

I had a particular rate eg 1.1% documented.
And the contract indicated for the life of the loan.
I was stunned when it was not returned to tracker and I have been in constant communication with the bank

Update Jan 2017: It appears that I am still part of the overall Tracker Review
 
Last edited by a moderator:
M

mister32

Guest
I will do thanks Brendan

By the way actually they said we note you have a case already open with the ombudsman and it will be dealt with there.

They didn't say exactly what complaint they were closing but I think it meant when I rang about the Aib announcement in July.
 
M

mister32

Guest
Brendan

Attached letter of offer pages 2 to 10
And letter from aib at time of drawdown. Note how the letter give a couple of options to fix either the rate or the amount at any time during the lifetime of the loan.
The letter makes it sound like a nice and simple process (not legally binding the customer to lose their original terms).

When I fixed it was simply a case of sending a letter to the bank

The wording was: "I wish to confirm that I would like to fix for a term of 3 years"

That was it

By the way when reading the offer letter the key thing to remember is that the mortgage is always referred to tracker as "variable".

If you start by reading it that way it makes sense.

If you try to impose a different meaning on the word variable eg SVR then it makes no sense

Or might seem like it's not even a tracker in the first place

(I have omitted pages 11 to 17 as they didn't seem relevant)
 

Attachments

Brendan Burgess

Founder
Messages
37,956
Can you attach AIB's reason for not offering you a tracker.

I suspect that their argument is as follows:

Clause 3.2 says "[if you don't fix at the end of a fixed rate period] ...the Mortgage Loan will convert to a variable interest rate Mortgage Loan."

Clause 3.5 says: "the interest rate applicable on a variable interest rate loan will vary according to the prevailing rates set generally by the Bank subject to these conditions."

A variable rate is a Standard Variable Rate and not a tracker rate.

I would counter this with:

A tracker mortgage rate is a variable mortgage rate.
After setting out the tracker rate in the letter of offer, it confirms that it is a variable rate.
I had a reasonable expectation that after my fixed rate expired, I would revert to the variable rate, i.e. the tracker rate, I was on.
If you meant Standard Variable Rate by the term "Variable Rate" then you should have specified this and you should have defined "Standard Variable Rate" in the contract.
If it was intended that at the time of the offer, that fixing would cause me to lose my tracker rate, then you should have stated this in the letter of offer.
If it was intended at the time of fixing that I was losing my right to a tracker, you should have highlighted this to me.


Brendan
 

Brendan Burgess

Founder
Messages
37,956
I had a particular rate eg 1.1% documented.
And the contract indicated for the life of the loan.
Hi mister32

Where does it indicate that the tracker rate is for life of the loan? Does it specify that anywhere? Or do you interpret these two clauses together to mean it?

upload_2016-11-29_8-0-29.png
 

Brendan Burgess

Founder
Messages
37,956
By the way actually they said we note you have a case already open with the ombudsman and it will be dealt with there.
I wonder if you should have a complaint with the FSO?

If the FSO rejects your complaint, it's over.

I would think that the hundreds (?) affected by this very specific issue should go to the High Court.

Brendan
 
M

mister32

Guest
Hi mister32

Where does it indicate that the tracker rate is for life of the loan? Does it specify that anywhere? Or do you interpret these two clauses together to mean it?

View attachment 1709
Yes that bit

And also the option to fix at any time during the lifetime of the loan implies a background condition (tracker) which would exist for the lifetime
And an extra option to freeze the rate at my choice.
 

Joe_90

Frequent Poster
Messages
2,226
There is no doubt that a "tracker rate" is a type of "variable rate" ie it is not a "fixed rate".

It clearly states that the "Tracker rate will equal the European Central Bank's refinancing operation minimum bid rate" in the special conditions.

But on the offer page it clearly states that "A variable rate moves in line with general movements in interest rates". This to me is not a reference to a "tracker" because a "tracker" moves directly in line with the ECB rate above.

Then as Brendan is outlined:
Clause 3.2 says "[if you don't fix at the end of a fixed rate period] ...the Mortgage Loan will convert to a variable interest rate Mortgage Loan."

Clause 3.5 says: "the interest rate applicable on a variable interest rate loan will vary according to the prevailing rates set generally by the Bank subject to these conditions."


So overall its a "Tracker rate loan" at date of offer, then it becomes a "fixed rate loan" and on the expiry of the "fixed rate" it comes a "variable rate loan" with "the interest rate applicable on a variable interest rate loan will vary according to the prevailing rates set generally by the Bank subject to these conditions."

As Brendan is said perhaps the get-out for you is that the Bank did not clearly state that at the end of the "fixed rate" you would revert to the "variable rate" and not the "tracker rate".
 

Brendan Burgess

Founder
Messages
37,956
Hi Joe

Is it reasonable for an ordinary consumer to understand all those terms from different parts of the document and to piece them together?

If it were all written in one place and the implications spelled out, there would be no objection. For example.

You are on a tracker rate - the margin is 1.1%.
The margin will remain fixed, but the underlying ECB rate will vary.
You can fix the rate at any time.
If you fix the rate, you will lose your tracker and move onto our SVR.
We can vary the SVR at any time.

Likewise, when mister 32 fixed, if they had told him that he was losing his tracker, then he would have no complaint now.

If AIB deliberately encouraged people off trackers, or deliberately failed to notify them of the implications...

I don't know if this was part of a campaign by AIB to get people off trackers. If it was, then mister and everyone else should get their trackers back.

Brendan
 
M

mister32

Guest
Joe

You are saying there is a contradiction in the letter. That by the way is the drawdown letter.

On the one hand they are clearly offering a tracker with a 1.1% margin

On the other hand they are describing a standard variable rate.

How could they get this basic information mixed up?

What does it mean legally?

Does it mean I wasn't offered a tracker originally. It was all a big mistake?


Or is it more likely that the way the documents were composed was a bit of copy and paste and the description of a variable rate is just a vestige of a previous document included by mistake?

That in my opinion is more likely
 
Last edited by a moderator:

Brendan Burgess

Founder
Messages
37,956
It's a badly written letter. They have general terms rather than tailoring the letter for your particular circumstances which was a tracker.

As it's confusing, I think it should be interpreted in your favour.

Brendan
 

Sarenco

Frequent Poster
Messages
5,530
I think Joe90's reading of the relevant clauses is spot on. I really don't see any ambiguity in the wording - it looks very clear to me.

It may well be the case that AIB got lucky with the contract wording but unfortunately that's really not relevant. Neither are the expectations of the borrower, legitimate or otherwise.

I appreciate that is not what the OP wants to hear but that's how I see it.

Obviously if it can be demonstrated that AIB consciously tricked borrowers to give up their trackers then that's a totally different matter.
 
M

mister32

Guest
Ah right Aib was defining two completely different things in that letter

Firstly a tracker rate

And then completely out of context another rate, this time SVR for the purposes of when a fixed rate expired


Hah hah ridiculous
 

joestrand

Registered User
Messages
14
Hi

I am in the same situation

I am away at present and cannot review my contract but from memory does the rest of clause 3.5 not reference the variable rate is subject to the terms and conditions in the letter of offer

This I think is very important because in my letter of offer my loan is defined as a tracker loan (varying) for 25 years

Thus on exiting my fixed rate I should have returned to my variable loan which is a tracker as defined in my letter of offer



It cannot be argued a tracker loan is a fixed loan
It is undoubtedly a type of variable mortgage

A SVR is not mentioned or defined in this version of the AIB contract

The other issue has to be intent

There is no possibility anyone in AIB designed this contract to deny tracker customers the right to return to their tracker rate after fixing
They were encouraging customers to take trackers and the subsequent terms and conditions specifically protect the right to return to a tracker

If at the end of the tracker my loan does not return to tracker I intend appealing to tracker review

I also have a complaint lodged with FSO which is currently on hold pending completion of tracker review by AIB

If appeal fails I will reactivate FSO complaint
 

Sarenco

Frequent Poster
Messages
5,530
Ah right Aib was defining two completely different things in that letter
That's it in a nutshell - the initial (tracker) interest rate and the run-off rate that would apply if you subsequently chose to fix. Two different contractual rates for two different circumstances.

It's pretty standard for mortgage contracts to provide that an SVR (sometimes called the default rate) will be the run-off rate following the expiry of a fixed rate period.

It's a tough break the way things have turned out but I can't see any argument based on the contract wording alone.
 

Brendan Burgess

Founder
Messages
37,956
does the rest of clause 3.5 not reference the variable rate is subject to the terms and conditions in the letter of offer
Hi Joe

Please do check your letter of offer and let us know. I have reproduced Mister 32s in full, which you will see on the attachment to his post - offer Page 6. For completeness, here is wording before and after.

upload_2016-11-29_16-45-44.png
 

Sarenco

Frequent Poster
Messages
5,530
Like I said that's ridiculous
Well, if you want to test the interpretation of the contract in the High Court that's obviously your prerogative. The alternative is to make a complaint to the FSO and hope he agrees with you.

At the end of the day my opinion is worth exactly what you paid for it!
 
Top