It should not matter much what your loan agreement says. If you make loan repayments, the balance reduces and the interest reduces. The only issue might be whether they calculate interest daily or monthly.
I suspect that they are making some systemic error. They are allocating your payments to some separate account which does not affect the mortgage balance. I remember hearing something similar before,but I don't think it was BoSI.
I presume that the interest charged is not falling at all? With a cheap tracker, the fall would be very small each month. For example, reducing the balance by €900 should reduce the interest charged the following month by 37 cents - assuming an interest rate of ECB +0.5%
So the good news is that their mistake has not been very expensive for you. €10,800 would save you €54 a year (10,800 @0.5%).
You need to write to them formally. The people in the call centres would not understand this.
If you get no reply, or if you get an unsatisfactory reply, go to the Ombudsman.
Brendan