Bank of Ireland Staff- Lost Tracker

Discussion in 'Issues with tracker mortgages' started by Onceagain, Nov 28, 2015.

  1. Sarenco

    Sarenco Frequent Poster

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    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?
     
  2. Sarenco

    Sarenco Frequent Poster

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    No, the BOI staff mortgage terms were quite distinct.
     
  3. Hogmeister55

    Hogmeister55 Registered User

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    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.
     
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  4. Sarenco

    Sarenco Frequent Poster

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    Is this not what the MFA provides in terms of the applicable roll off rate?
    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.
     
  5. Hogmeister55

    Hogmeister55 Registered User

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    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.
     
  6. Pinesky

    Pinesky Registered User

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    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 .
     
  7. Sarenco

    Sarenco Frequent Poster

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    In what way is the wording "wrong"? Do you mean it's morally wrong?
    The key word being "IF". To the extent that a borrower is not converting to a tracker that provision is obviously irrelevant.
    I don't agree that the wording has that meaning and I certainly like to think that I'm a reasonable person. In any event, my reading of the wording is not particularly important.

    Have you considered testing your thesis in the courts? If you are so certain that your interpretation would prevail why haven't you sued BOI?
     
  8. Sarenco

    Sarenco Frequent Poster

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    That's quite possibly true but can you imagine the uproar if BOI gave staff a preferential rate to which they had no contractual entitlement when they were being partially bailed out by the State?
     
  9. Hogmeister55

    Hogmeister55 Registered User

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    Hi Sarenco, they are all fair points. Obviously I am not entirely impartial in this. But to answer your questions.

    The wording on the 2 MFAs is wrong in that both refer to moving from a fixed rate to either staff variable or to fixed but at the time of signing either we weren't moving from fixed rates. Not a moral issue just wording.

    On the second point the only rate referred to in the MFA is the tracker.
    It mentions what happens to the rate IF you return to tracker, explaining the rate will be changed within 5 day of an ECB move etc however it does not refer to any other rates Eg If return to variable rate etc.. The rate will be set by the bank at its disgression.

    When colleagues complained a few years ago and got nowhere I just accepted that there was no case. I have only really looked at it again in the last few months and reviewed paperwork and the consumer protection rules. I believe we do have a case however like most of staff caught up in this I am not an mortgage expert.
    At this stage I will be waiting for a final answer from the central bank review and depending on independent advice i will decide then.
    For me the courts is a last resort and suing your employer is a serious career defining move. Thats before working out how to fund a high court case....
     
  10. Pinesky

    Pinesky Registered User

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    I think you're correct but there might be an implied contact given the bank's previous behaviour. Unless the bank capitulates it would have to be tested in Court .
     
  11. Sarenco

    Sarenco Frequent Poster

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    Sorry but I don't understand that - could you rephrase?
    Did you mean discretion? That obviously doesn't refer to a tracker but perhaps I'm missing your point.
    Of course. But a lot of impacted borrowers are no longer BOI employees. To my knowledge, none have taken a successful case which seems odd if the case is that clear cut.
     
  12. Linten

    Linten Registered User

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    The first MFA that we signed in Aug/Sept 2006, involved switching from Tracker (variable rate) to the BIK linked product - also variable...however the MFA stated 'in converting from Fixed rate to staff mortgage rate and this was clearly factually incorrect.
    When we switched from the staff mortgage rate in Jan 2007 the MFA stated 'in converting from a fixed rate to the 2 year fixed - again this is incorrect as we were switching from a variable rate - these were the two issues with the errors in the MFAs.

    The bigger issue however is around the wording of the first MFA and the 'roll to' rate, which was stated as 'Home Loan variable rate'. Anybody who drew down a BOI mortgage on Tracker received an Offer Letter which confirmed that it was a Variable rate mortgage - you had to go to Part 4 of the Offer for Special Condition confirming interest rate applicable being a variable one @ no more than 0.95%. above ECB for life of the Loan. It is a variable rate mortgage.

    There are numerous posts in relation to UB customers being restored to Tracker based on "mortgage customers who have been affected by the use of ambiguous and confusing terminology in our mortgage documentation" - according to UB letter to @DurcanU - see thread Ulster Bank Mortgage Contracts. At issue in these cases has been the definition of the roll to rates in UB MFAs. They used 'Ulster Bank Home Loan rate' and this has been considered in the view of the Ombudsman and the Bank itself as part of the review to be 'ambiguous and confusing' to the customer. This is a decision based on the Consumer Protection Code focus of the review - finally some clearcut evidence and consumers getting their Tracker back on the back of it.

    Surely the Bank staff MFA was equally confusing and ambiguous... you would have thought given that some of the UB cases were restored in 2014, that the Central Bank would have joined the dots and in the interests of consistency and uniformity of approach, would have made a positive ruling in relation to these staff mortgage MFAs. I am not aware of any Bank staff having made a legal challenge to the Bank on the decision not to restore and for serving Bank staff this would be quite difficult, but I would have thought that was the purpose of the CBOI review to identify anomalies and put them right. Do your job Central Bank.
     
  13. Sarenco

    Sarenco Frequent Poster

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    Hi Linten

    Thanks for clarifying that the errors related to the recitals of the rates that pertained prior to signing the respective MFAs, although I'm not sure that anything really turns on it.

    The FSO decisions in the UB cases that you reference didn't have anything to do with the CPC - the decisions were made on the basis of the contract wording alone. The FSO agreed with the complainants that the wording was ambiguous and therefore - quite correctly - interpreted the phrase "Ulster Bank Home Loan Rate" against the interests of UB. As part of the current review process, UB has obviously found a significant number of similarly worded contracts and, not before time, has restored the relevant borrowers to tracker rates.

    As far as I am aware, the FSO has never found that the phrase "Home Loan Variable Rate" that appears in the BOI MFAs is similarly ambiguous. Now you may well disagree with the FSO's findings in this regard but the UB cases are clearly distinguishable.

    I certainly agree that the lack of transparency on the approach that the Central Bank to these cases is very unsatisfactory.
     
  14. Onceagain

    Onceagain Frequent Poster

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    We have all held off our complaints with the FSO, pending the central bank tracker review. The FSO has not confirmed anything either way as of yet for many of us.
     
  15. Sarenco

    Sarenco Frequent Poster

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    Fair enough but the point stands that the FSO has not, as far as I am aware, yet determined that BOI MFA, and in particular the phrase "Home Loan Variable Rate", is ambiguous so it can be distinguished from the UB cases referenced by Linten.
     
  16. Linten

    Linten Registered User

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    That is accepted on the basis of what we know...my point is that given the ambiguity around how the mortgage is described in the Offer Letter as 'variable' it would not be outside the bounds of possibility that you you could interpret 'home loan variable rate' in an MFA to represent a continuation of what was first outlined in your offer letter...that's my view, biased maybe but not unreasonable...

    In relation to the UB cases, while Sarenco is categoric in his view that they have nothing to do with CPC, I don't know if I would be that sure. UB decided not to challenge these cases at law and their correspondence to customers talk about the nature of the MFA and the lack of clarity. In addition the FSO example highlighted in earlier post does not refer to the customer having a contractual right to return of Tracker...more it talks about vague, misleading and ambiguous documentation. I'm not saying definitively but I don't think you can just rule it out that there was not a link in these cases to Consumer Protection Code (I'm determined to find proof !!) ...Ombudsman ruling;
    It seems the Complainant was never advised that the Ulster Bank Home Loan Rate is also known as the standard variable rate. It seems to be me that the is nomenclature utilised by the Bank that lies at the very heart of the matter. .............
    ...................I do not believe the Complainant was adequately advised of the fact that the standard variable rate would apply to his house mortgage at the conclusion of the fixed rate period, as opposed to the tracker rate, if he opted not to select an alternative product.

    It is my considered opinion that the terminology used by the Bank in the above quoted paragraph of the Fixed Rate Authority is ambiguous, vague and misleading...............

    .......I find that in view of the discrepancies in the terminology used by the bank and the confusion caused thereby, when the Complainant signed the Fixed Rate Authority, he formed a legitimate expectation that his house mortgage would revert to the tracker rate of 1.05% above the ECB rate, upon termination of the fixed rate term.

    For the reasons outlined above, this complaint has been substantiated. I find the bank acted wrongfully by failing to offer the Complainant the option of reverting to the original tracker rate of 1.05% above the ECB rate upon expiry of the fixed rate period of the 31 July 2008.
     
  17. Onceagain

    Onceagain Frequent Poster

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    Just to let others know I got a letter from boi saying re timescale.

    " given the scale and complexity of the process is anticipated that this examination will conclude in 2017.Given the level of resources and oversight on the examination, please be assured that any issues associated with tracker mortgages will be identified and addressed and I will make contact with you again as soon as I can."
     
  18. MorgVar

    MorgVar Frequent Poster

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    Have BOI confirmed how many tracker customers restored or total approx number❓ Presume They have reported to Oireachtas Finance Committee ❓
     
  19. Onceagain

    Onceagain Frequent Poster

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    Anyone know what date Boucher is going? Who is tipped to replace him?
     
  20. Deiseblue

    Deiseblue Frequent Poster

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    Richie is off before the end of this year.

    The usual tributes in the media which funnily enough fail to mention the fact that he was in charge of retail banking which tanked at the outset of the recession.