Bank of Ireland Bank of Ireland Staff- Lost Tracker

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Hogmeister55

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I wouldn't agree that BOI has a particularly low restoration rate compared to other lenders.

Don't forget that, in addition to the 602 accounts recently identified as part of this review process, BOI previously restored trackers to 2,096 accounts back in December 2011 as a result of an earlier review.



I do agree with you that it seems completely fanciful to imagine that BOI were far-sighted enough in 2006 to take steps to trick anybody out of trackers that they would otherwise be entitled to once their fixed terms expired when you consider that they BOI continued to offer trackers as late as September 2008.
I would agree. I would doubt BOI deliberately started out to do this. This makes the situation even worse.

Through incompetence they sold a product without understanding it could bring down the bank or at least cost them a fortune. Despite paying a CEO 2 million a year they didn't understand fundamental banking principles of risk.

When they did work it out with the help of a few ECB rate cuts they decided to use their own interpretation of contractual and consumer protection laws to try and cover their tracks. Leaving thousands of customers on the hook for it.

2698 people have already proved that.
 

Sarenco

Frequent Poster
BOI are currently earning a spread of around 40bps on their tracker book (i.e. it's a profitable book of business).

The major problem that all our banks are still grappling with are horrendous default rates.
 

Mickon

Registered User
They knew before that as part of their risk management otherwise why would they go to so much bother with their clause MFA especially when offer letter stated for the life of the loan. People didn't know what tracker was it was only referred to as variable (repo) +% . The bank had no control over these rates themselves and left them venerable so they decided to get us back on their own variable rate where they can charge what they want,their main objective is profit not you,me,or even ther employees.
If it was the ECB rate that had risen they could have us held accountable for the term of the loan not allowing you rates under that.
 
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Pinesky

Registered User
This post is complete fiction . Nobody in BoI attempted to "relieve " customers of their trackers before Autumn 2008
 

Pinesky

Registered User
"Through incompetence they sold a product without understanding it could bring down the bank or at least cost them a fortune. Despite paying a CEO 2 million a year they didn't understand fundamental banking principles of risk" .

This is also completely incorrect . Most of the senior management , including the CEO , were around in 1992 during the EMS crisis and the devaluation of the Irish Punt . A similar divergence occurred then between Official Rates and Market Rates and the interest rate risk inhererent in the tracker offering was well understood. The duration of the divergence was underestimated . However the only game in town between 1999 [the arrival of Bank of Scotland Ireland ] - 2008 was market share ,even though this ultimately meant following competitors over the cliff .
 

Mickon

Registered User
Why then put provisions in place not allowing the loan to default back to the original loan offer in their MFAs ? I'm not talking about the staff in branch it came from the top of the tree.
 

Pinesky

Registered User
Why then put provisions in place not allowing the loan to default back to the original loan offer in their MFAs ? I'm not talking about the staff in branch it came from the top of the tree.
Are you referring to staff MFAs or MFAs for "ordinary" customers ?
The 5 cases of "ordinary " customers , that I assisted with , who went on 3 year fixed in 2006 , had their requested return to their original tracker margin denied in 2009 but all were subsquently returned to their original tracker margin .
 

Pinesky

Registered User
I wish I had been one of your customers I fixed in 2006 for 3 years lost tracker because of this.
are you staff ? Don't give hope yet . There's a good bit to go in this process yet . Pauric's presentation to the Oireachtas will turn up the heat on the Banks . Best of luck .
 

Sarenco

Frequent Poster
I assume we are still talking about BOI staffers that switched from a tracker to the discounted staff variable rate before fixing?

The fact that the staff variable rate did not track the ECB refi rate was actually presented as a benefit of the product -
"Bank of Ireland Mortgages are delighted to offer you our new staff non-standard variable rate mortgage at just 3.50% currently". "Key Benefits for our Staff 1. Market Leading Rate 2. No Benefit in Kind 3. Not directly linked to ECB Interest movements - important given predicted interest rate increases over coming 6 months 4. Simple and easy to avail of"
 

Hogmeister55

Registered User
I assume we are still talking about BOI staffers that switched from a tracker to the discounted staff variable rate before fixing?

The fact that the staff variable rate did not track the ECB refi rate was actually presented as a benefit of the product -
Just like a fixed rate doesn't track the ECB rate.
 

Mickon

Registered User
No I'm not staff but surely you should be treated the same as (ordinary) people at least I hope Pauric will shake things up a bit in the oireachtas we live in hope.
 

Sarenco

Frequent Poster
Just like a fixed rate doesn't track the ECB rate.
That's certainly true but surely we're talking about the roll-off rate? The relevant BOI staffers deliberately and consciously opted to switch from their trackers to a discounted staff variable rate before they fixed - no?
 

Hogmeister55

Registered User
There was no stated roll off rate or declaration that by moving to a staff rate that a tracker would no longer be available. The only rate declared to be not available in future was a special staff rate of 3%.
There was a special staff rate of 4% that was declared staff could return to.
Trackers were not mentioned.
 

Sarenco

Frequent Poster
Is this not what the MFA provides in terms of the applicable roll off rate?
3. In converting the loan to a Staff Mortgage loan, I agree that the interest rate applicable to the loan is a variable interest rate and may vary upwards or downwards. The rate shall be the higher of the following two key indicators (1) the prevailing Revenue Commissioners BIK ( benefit in kind) reference rate (2) the one month Cost of Funds reference rate (which is equivalent to the one month EURIBOR rate issued by Bank of Ireland Global Markets on a daily basis). In the event that the Staff Mortgage Rate is certified by the Society to be unavailable for any reason the interest applicable to the loan shall be the prevailing Home loan Variable rate. Notification of any change in the interest rate with condition 6(b) of The General conditions of my original offer letter..
In other words, the roll-off rate is the discounted staff variable rate that applied prior to fixing.

Of course, as it turned out Revenue cracked down on these discounted staff rates but I am struggling to see the argument that professional bankers were somehow duped into these arrangements.
 

Hogmeister55

Registered User
That is first MFA when switching to the staff variable rate. NB. The wording is wrong on both MFAs

The second MFA when switching to fixed states that IF converting to tracker at the end of the fixed rate period how the rate would be determined etc

Any person reading that MFA could reasonably assume they could convert to tracker at the end of the fixed period. Remember the person who wrote the contract (BOI) has the opportunity to clearly state what they mean. The signer of the contract (customers including staff) doesn't. That means their reasonable interpretation of what they are signing will win any court case.
 

Pinesky

Registered User
That's certainly true but surely we're talking about the roll-off rate? The relevant BOI staffers deliberately and consciously opted to switch from their trackers to a discounted staff variable rate before they fixed - no?
I'd agree with you that it looks like that on the face of it . The logic of all these shenanigans was to provide the best possible rate for staff without incurring BIK and staff unsurprisingly bought into this . But the reality is BoI broke this "trust" in 2008 . My own opinion is that BoI have since 2008 used the BIK as a smokescreen. If staff were returned to their original trackers it should be possible to construct a strong case that it would not attract BIK .
 
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