Central Bank review of trackers for other banks

Gerard123

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In my mind - Yes absolutely, Financial Advisors - Yes, no hesitation. However, while certain in my own mind, and so as not to be wasting my, or indeed anyone's time, I ran my documents by two financial advisors to see if I had a solid case (third party opinion).

One of these advisors is very experienced in these matters and has been in the media often (I didn't engage him formally so not using name here but I did send my documents to him and spoke to him on them). Both advisors were of the view that my case was virtually water tight, that's how sure they were. Because of the fact that they thought my case was so compelling I did the FSO work myself, big mistake in hindsight, and since there is no right of appeal to FSO (other than High Court) I had no other way to appeal or to then get an Advisor to help.

FSO - ruled against me though and was very much persuaded by the Banks arguments and, in my mind, a misrepresentation/miscommunication of a key document by the Bank. Once the FSO rules that's it, I was not provided with the Banks rationale or explanations prior to the Ruling so I had no chance to dispute what they said other than via High Court.

Anyway I do not wish to rehash the whole case as it was hugely time consuming, at this stage I really want to know how best to interact with the Central Bank on it, and encourage others to do the same.

Many thanks.
 
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Sarenco

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5,499
Ok but I would have thought it would be pretty clear - the loan documentation either says you are entitled to revert to a tracker rate at the end of the fixed rate period or it says something else.

Where's the mystery?
 

Gerard123

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Ok but I would have thought it would be pretty clear - the loan documentation either says you are entitled to revert to a tracker rate at the end of the fixed rate period or it says something else.
Yes one would have thought so also. Then again if that was the case I guess there would be no need for a CB review of trackers, no recent PTSB issues, no return of trackers to a whole swathe of other people .... oh for a simple life indeed where plain English means just that, plain English. Of course that's before Banks and lawyers get their hands on stuff and distort, misrepresent......... and seek to deny and distort plain English, the common mans view of plain English.........

Where's the mystery?
Sorry to say, no mystery. Perhaps a Banks creativity. Does that qualify as a mystery? Documentation that says you're entitled to a tracker can be misquoted, misrepresented, we don't do trackers anymore, yes the Bank told you, no they didn't, etc, etc ............ a mystery? ......... your call!
 

Bobby43

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Can anybody cast light on our situation;
Loans obtained on two properties April 2006. 1 year fixed rate
May 2007 received letters offering a tracker or variable options. Following visit to Bank during which I was advised could have variable rate but could revert to tracker later. Opted for tracker on one and 3 year variable on other. Received letter confirming "account has been switched from a tracker rate to a fixed rate."
May 2010 sought to revert to tracker and told no longer possible.
Complained to FOS on basis that Bank misled us and no advise was given regarding the consequences of breaking from tracker. The complaint was not upheld.
 

Sarenco

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Yes one would have thought so also. Then again if that was the case I guess there would be no need for a CB review of trackers, no recent PTSB issues, no return of trackers to a whole swathe of other people .... oh for a simple life indeed where plain English means just that, plain English. Of course that's before Banks and lawyers get their hands on stuff and distort, misrepresent......... and seek to deny and distort plain English, the common mans view of plain English.........
The PTSB issues related to borrowers that broke the term of their fixed mortgage rates early and who subsequently wanted to move to tracker rates. The fixed rate mortgages which these customers had been on included a provision that at the expiry of the fixed rate term the customers could revert to a tracker rate. However, as the customers had chosen to break the fixed rate term early, the bank did not permit them to revert to a tracker rate. Ultimately, PTSB conceded that this was an incorrect approach and this lead to the establishment of the current redress scheme.

While I am not suggesting for a moment that you don't have a genuine grievance, I am still totally unclear what is the exact nature of your complaint.

Could you simply tell us exactly what your loan contract says in relation to reverting to a tracker on the expiry of the fixed rate period? In plain English!

You are obviously under no obligation to do so but it may be helpful to others in a similar position.
 
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Bobby43

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No, nothing in writing except a letter acknowledging receipt of loan offer and confirming that "account has been switched from a tracker rate to a fixed rate."
The contract states that initially the interest rate shall be fixed and at the end of the period both bank and borrower shall have the option of converting to a variable rate . No specific mention of " Tracker " but letter confirming end of fixed period offers a tracker as a default option.
 

Sarenco

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Thanks Bobby.

Just so I'm clear - you started off on a tracker, fixed for a period and the loan terms provided that you could fix again at the end of the fixed term or opt for a variable rate. Is that correct?

Could you be a bit more specific about the letter - did it use the word "offer" or did it say you would revert to a tracker in the absence of any contrary election on your part (the "default option")? The exact wording is important.
 

Bobby43

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Hi Sarenco,
Started on 1 year fixed. the loan terms provided that we could fix again at the end of the fixed term or opt for a variable rate. this is correct.

Letter states " Please find attached the current options available to you, including our competitive tracker variable rate...."
" If we do not receive a written instruction from you in relation to the above on or before...., we will automatically default your loan to the tracker variable rate.
The next letter from the bank was dated the day after the closing date and included the following "account has been switched from a tracker rate to a fixed rate."
 

Sarenco

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5,499
Hi Bobby

So you started on a 1 year fixed rate and if you had done nothing at all you would have defaulted to a tracker rate on the expiry of the initial 1 year term. Instead, you decided to fix again for a further 3 years and communicated this to the bank on or before the date upon which you would otherwise have defaulted to the tracker.

Unfortunately, the loan contract relating to the 3 year fix did not provide that you would be entitled to a tracker at the end of the 3 year term and the bank did not repeat the same offer that they made during the initial 1 year fixed rate term that would have allowed you to opt for (or default onto) a tracker.

Have I got all that right?
 
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rodger

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Gerard123

Can you tell me if your case is with Aib and was there two or three options at the end of the fixed rate?

There are examples like this where in the case of the 3 options i believe both Aib and ombudsman are handing back tracker. Indo august.

In the case of the two options it has been less straightforward although I know they are entitled and will win if goes to court.
I am in that boat.

What we really need the CBI to do is to start handing back trackers en masse to those who are entitled and not have each person fight his own corner as Gerard said.

Hope this helps.

Did everyone see the article in indo today?
By Charlie Weston.
Padraic Kissane and Brendan Burgess contributed.
Brendan made the point that CBI should review all negative FSOB decisions.

That is an excellent idea.

I also suggest although this is obvious but I haven't heard anyone actually say it... All positive FSOB decisions should be rolled out to all likewise customers.
Further any cases where the bank caved in before a ruling by FSOB should similarly be applied to all similar customers.

The whole thing is rife with inconsistencies.

And works to the advantage of the banks.

The fsob got it wrong in 2010, 2012.
And for that reason keeps coming back to similar cases.

Hopefully the CBI will get it right once and for all.
 

Bobby43

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HI Sarenco,Rodger,
Please see following;

So you started on a 1 year fixed rate and if you had done nothing at all you would have defaulted to a tracker rate on the expiry of the initial 1 year term. Instead, you decided to fix again for a further 3 years and communicated this to the bank. AFTER the date upon which you would otherwise have defaulted to the tracker.Hence the letter dated the following day and it's confirming that "account has been switched from a tracker rate to a fixed rate."It is important to note that one mortgage was allowed to default into a tracker and the other fixed.

Unfortunately, the loan contract relating to the 3 year fix did not provide that you would be entitled to a tracker at the end of the 3 year term and the bank did not repeat the same offer that they made during the initial 1 year fixed rate term that would have allowed you to opt for (or default onto) a tracker. This is so. The official in the branch office told me however that I would be able to revert to a tracker at the expiry of the three year fixed period and it was this that persuaded me to fix the interest rate.The CBI have issued comments a number of times about the requirement for lenders to give sufficient informationregarding the consequences of breaking from the tracker. No such advise was given at the time.

I have not yet seen to-days article but will read it now. It is likely to be similar in tone to everything else that has appeared in print recently
 
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rodger

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What will the CBI do in their review?

Here is what I would suggest (if I was the central bank)

Phase 1: Investigation
  • First go through the FSOB cases with fine tooth comb.
  • Take "positive" rulings and ensure all customers (even ex customers) get same benefit.
  • Take bank concessions (where bank caved in but FSOB didn't actually make a ruling) and ensure all customers (even ex customers) get same benefit.
  • Take "negative" rulings and reopen them: fresh start on each one ignoring completely what the FSOB ruled.
  • Next gather industry experts (Padraic Kissane, Brendan Burgess, IMHO, etc etc) and get their insights.
  • Next invite members of the public to submit their experiences (maybe advertise).
  • Maybe ask ex-bankers to tell their story confidentially.
  • Look for meeting minutes from around that time
  • Obviously get itemised lists of all customers who were EVER on a tracker.
  • Organise trackers into buckets according to each set of terms and conditions
  • Arrive at a ruling with careful consultation on each "bucket". Look to industry experts to buy in to all decisions.


Phase 2: Action
  • Having reached conclusions on what actions to be taken, bring in the bankers into a meeting tell them about the €10m fines they are facing
  • Inform them of the cases that are going back on tracker.
  • Inform them of the compensation they are going to provide ( I would say a minimum of 50% of the money owed to customers).
  • Blanket and immediate refund: never mind a redress scheme
  • Further hardship cases can be argued subsequently with legal experts

Phase 3: Penalties
  • Finally apply those €10m fines because that's the only way they will learn.
  • Strike off those banking directors who are found to be responsible and deny them their pensions.
 
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rodger

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bobby43: did the bank act in your best interests? No? Then you have a case.
 

Bobby43

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bobby43: did the bank act in your best interests? No? Then you have a case.
Definitely not. Thanks for that Rodger We concur and I am going to send a package of documentation to the central bank and see where that gets me.Have read the article and it seems that the Central Bank are becoming quite serious now. Hopefully it will work out for all of us in the end
 

Sarenco

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5,499
HI Sarenco,Rodger,
Please see following;

So you started on a 1 year fixed rate and if you had done nothing at all you would have defaulted to a tracker rate on the expiry of the initial 1 year term. Instead, you decided to fix again for a further 3 years and communicated this to the bank. AFTER the date upon which you would otherwise have defaulted to the tracker.Hence the letter dated the following day and it's confirming that "account has been switched from a tracker rate to a fixed rate."It is important to note that one mortgage was allowed to default into a tracker and the other fixed.

Unfortunately, the loan contract relating to the 3 year fix did not provide that you would be entitled to a tracker at the end of the 3 year term and the bank did not repeat the same offer that they made during the initial 1 year fixed rate term that would have allowed you to opt for (or default onto) a tracker. This is so. The official in the branch office told me however that I would be able to revert to a tracker at the expiry of the three year fixed period and it was this that persuaded me to fix the interest rate.The CBI have issued comments a number of times about the requirement for lenders to give sufficient informationregarding the consequences of breaking from the tracker. No such advise was given at the time.

I have not yet seen to-days article but will read it now. It is likely to be similar in tone to everything else that has appeared in print recently

Thanks - the first point looks like it might be promising.

Are you saying the bank put you onto a new, 3 year, fixed rate without your consent or agreement? Ignore the date of the letter of confirmation from the bank for a moment, did you ever advise the bank that you wanted to fix for a further three years? If you did, when did you advise the bank that you wanted to fix your rate for a further 3 years? Critically, was it before or after the date upon which you would otherwise have defaulted to a tracker?

I'm confused by your reference to breaking out of a tracker. Were you ever on a tracker or did you ever break out of a fixed rate mortgage in circumstances where you would have been entitled to revert to a tracker if you had not broken out of your fixed rate?

Apologies for all the questions but the detail is critical.
 

Sarenco

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5,499
bobby43: did the bank act in your best interests? No? Then you have a case.
Whatever gave you that impression!

Banks are not required to act in the best interests of their borrowers. Just like any other company, banks are required to act in the best interests of their shareholders.

Do you expect Tesco to act in your best interests? No? Well, why do you think banks are any different.

They are businesses - not charities - and have a legal obligation to maximise the value of their shareholders' capital investment.
 
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rodger

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quote from today's article:

It said it was engaging closely with a number of lenders to ensure they acted in the best interests of customers who had trackers at some point.
 
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rodger

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Sarenco asked: Where did I get that idea?

Quote:
The Central Bank added: "We remain concerned that there may be other tracker-related issues which could be impacting on consumers across the system." It said it was engaging closely with a number of lenders to ensure they acted in the best interests of customers who had trackers at some point.
 
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