Central Bank Tracker Review

MorgVar

Frequent Poster
Messages
59
Im getting more and more and confused and frustrated by the whole process and lack of transparency and information around the CB review. When announced last year there was no clarity on process released by CB and since the whole process lacks transparency. The review began without any process being published.They appear to have consulted in secret with select people and no public consutation process or invitation for public submissions which would appear proper for a public body. Numbers affected in commentry could be 10,000? customers, and last opportunity for custmers who lost trackers.

Im also confused on relationship and role if any, of the FSO in this process. In October last year the FSO announced a review of their previous decision on trackers since 2009- anybody know outcome of this or relationship with CB review.

Banks have also not given affected customers any clear info of process, appeal mechanisms if any and details of Independent Third parties which each Bank is to have appointed. Each Bank appears to make up their own rules on process. Customers should have opprtunity for direct engagement with these third parties appointed by each Bank??

Perhaps Padraic Kissane or Brendan may be able to update on above aspects?
 
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rodger

Guest
Right so 300 for Aib not so hysterical after all?

Boi will have 200 employees

At a cost of 100,000 each that's 20m per year

And over 5 years that's €100 million

Just for the investigation before anyone gets a cent
 

Sarenco

Frequent Poster
Messages
5,499
Rodger

I don't think anybody accused anybody else of being hysterical. I certainly didn't - I simply queried where the figures were coming from.

I have no idea how many employees BOI will ultimately dedicate full time to the tracker review exercise. Neither do you.

No idea where you are getting your cost figure of €100k per employee but I suspect that's just a wild guess. Onceagain suggested that these are secondment positions so presumably the staff members are already on BOI's payroll.

Again, where are you getting five years from? Even if BOI did dedicate 200 staff to reviewing, say, 10,000 files (per your estimate), that would mean that each dedicated staff member would only getting through 10 files per year. Does that sound plausible?

I don't believe completing the tracker review exercise at BOI will cost anything even remotely like €100m.
 
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rodger

Guest
I would be surprised also. That's why I posted this in the first place.

Based on media statements by Aib they are suggesting unprompted by anyone that they are planning to spend approx 300 million on their tracker review.

I explained 100,000 is the gross cost of employing a person on a salary of 50,000

My point when you get over disagreeing with me, is would not the money be better spent reverting customers to tracker?

Is there a ball park figure for putting 3000 Aib customers back on tracker?

Is the world gone mad?

If you doubt the 5 years and you doubt the 300 employees then take it up with Niall Brady Sunday times
 

Sarenco

Frequent Poster
Messages
5,499
Where did AIB say they were planning on spending 300 million (!) on the review process?

All AIB have said is that they have set aside €102m as a contingency to address any redress payments that might arise following the review process and that it might take five years to fully sort out conduct issues. Everything else is pure conjecture.

The Central Bank has said that the review exercise must be concluded in 2017. Lenders do not have 5 years to conclude this exercise.

The purpose of the review exercise is to identify customers that have been impacted by (a) a failure by a lender to honour its contractual obligations; and (b) its failure to comply with any applicable regulatory disclosure or transparency requirements.

In my opinion, this is a worthwhile exercise even if it only results in a relatively small number of borrowers receiving any redress payments. Sure, there is a cost associated with conducting the review exercise but I can't see how the cost would approach anything even remotely like the sort of numbers you are suggesting.
 
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rodger

Guest
It is a worthwhile when it results in the banks returning customers to their right and proper rate, the rate they are entitled to regardless of the number affected.

Meanwhile the banks are prepared to spend millions on the review before a penny goes to customers.
 

Sarenco

Frequent Poster
Messages
5,499
Hopefully we can agree that the process is worthwhile if it identifies any cases at all where a lender failed to honour its contractual obligations to a customer (or even if establishes that there are in fact no such remaining cases).

However, that can only be established following a detailed review of cases that are in scope. How else can it be established whether customers are paying the right rate as per their contractual entitlements? Yes, this exercise comes at a material cost to the banks.
 
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rodger

Guest
I hope we can agree that the banks are prepared to cheat their customers and spend money covering up their mistakes.
 
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rodger

Guest
where a lender failed to honour its contractual obligations to a customer


= cheat
 

Sarenco

Frequent Poster
Messages
5,499
But how could you possibly know whether a lender has failed to honour it's contractual obligations if you don't review the relevant contracts? The power of Devine intervention?

The purpose of the current review exercise is largely to identify whether any such cases still exist.
 

PJDCol

Frequent Poster
Messages
134
If this is about the contracts situation only then I think most people don't have a leg to stand on. I signed a contact that said I would move to a standard variable rate at the end of the fixed rate. I fully realise that.

However if it turns into a Code of Conduct debate then maybe the Central Bank will make a decision in people's favour. If IIB advertised to brokers (we've all seen the flyers) that the option of going to a "tracker" after fixed rate then the document people signed in relation to this product (fixed rates) clearly didn't give this option. I also have a signed document from one of the biggest brokers in Ireland that lists out the reason why IIB best suits your interest in a mortgage. No 2 on the list is "should you choose a fixed rate, you will have the choice of another fixed rate when this expires or you can choose a variable or tracker rate". Again this option was not actually available. I don't know how much weight that a signed broker document would hold.

Now I am no Code of Conduct expert but those 2 examples seem like false advertising among other things to me! I've debated the contracts wording of variable rate v tracker already which was also shocking and for me broke Code of Conduct rules but the bank already disagreed with me there!!! Anyway lets just see what happens with Central Bank.
 

bmkearney

Registered User
Messages
20
Guys this was my submission to the FSO in November 2015 and I agree with a lot of what pcoleman. If people could advise me what they think of my argument cheers.


We wish to add the following submissions regarding the contents of the documents received from BOI.

Firstly why have BOI not produced the letter we have sent in our original complaint to yourselves dated August 2008 regarding the Mortgage loan rate reverting to 5.5% representing the Tracker variable rate if no option signed and returned. This letter is very important as it contradicts the argument that BOI are using under Clause 7(b).

We also wish to challenge BOI on Clause 7(b) regarding failure to exercise a choice that the interest rate applicable to the Loan will be a variable interest rate. BOI have clearly not advised if this is a standard,existing,homeloan or tracker variable rate. This means that BOI are allowed to argue which of the above variable rates the Loan can revert depending on the markets rates at the time to suit BOI. On the same note then surely we are entitled to argue the same. The fact they do not clearly identify what the variable rate under Clause 7(b) refers to, we believe strengthen our case.

As you can see from all of our rate offers letters over the years we have been offered four different types of variable rates by BOI.( Homeloan variable rate,a Standard variable rate, an Existing Variable LTV rate and a Tracker variable ECB+1.25%). So which of the above variable rate option does Clause 7(b) represent or does it represent them all which is win win for BOI.

We again refer to the offer letter dated August 2008 that BOI were going to revert our Loan to a variable rate of 5.500%(tracker ECB+1.25%) and not that of the variable rate of 5.790%(homeloan variable). This letter is proof that our Loan was going to revert a Tracker variable rate.

Also the below is a paragraph from the consumerhelp.ie website regarding coming to the end of a fixed rate mortgage term.

At the end of a fixed rate term, your lender will write to you and outline your options, which may include:
moving to a standard variable rate
fixing for another term, perhaps 1,3 or 5 years
moving to a tracker rate - but only if this was offered to you at the time you signed up for the fixed rate. Look at the documentation your lender sent you when you signed up to a fixed rate, as this will detail what your interest rate will revert to after the fixed rate term ends. If a tracker mortgage was one of the options, then your lender must offer you the tracker rate, even if they are no longer widely available. If you do not have the documentation, contact your lender and ask for a copy.

If you are unhappy with the options your lender is offering you when your fixed rate term ends or you feel that your options were not explained fully, you can make a complaint.


We have underlined the part that is relevant. We believe this also improves our case as our offer letter dated August 2008 had a tracker as one of the options and also advised the loan would revert to the tracker rate of 5.500% as this was the end of our 2 year fixed rate taking out in August 2006.

For taking the above submissions into consideration we would be most gratefully.
 

todo

Frequent Poster
Messages
264
I agree that BOI's definition of a variable rate is very misleading as that clause 7B is included regardless of the type of variable rate.

They rely on special conditions to further define the rate, but if no special condition is included I can see how a consumer could easily think they are on a different type of rate.

When did you take out the mortgage?
Were you on a tracker and then fixed, and then at the end of the fixed period they put you on svr?

If you were on a tracker and then fixed, then you have a very strong case as your original contract will have the special condition. I would use that special condition as the basis for the definition of what a "Variable Rate" is.

The text you have underlined is very interesting and I think you have a case, BOI should have spelled it out in clear plain simple english what variable rate the mortgage should return to once the fixed period ended. In my opinion just saying it will return to a variable rate is not definitive enough, particularly when they at the time were using that term to describe a number of different mortgage types.
 

notabene

Frequent Poster
Messages
333
Would you do a data protection request on BOI to see what information they have - or do not have as the case may be?

What did your fixed rate agreement say and what did your original mortgage contract say - in mine, with Ulster Bank, for example, it stated that the tracker was for life of the mortgage & did not specify any conditions, such as fixing where you would be at the loss of this tracker rate.

The Ombudsman then found that I should have therefor defaulted on to the tracker rate at the end of the fixed period

If a contract is ambiguous the law favours the party who did not draft the contract as the other party drafting it had every opportunity to put exactly what they required in the contract.
 

bmkearney

Registered User
Messages
20
I agree that BOI's definition of a variable rate is very misleading as that clause 7B is included regardless of the type of variable rate.

They rely on special conditions to further define the rate, but if no special condition is included I can see how a consumer could easily think they are on a different type of rate.

When did you take out the mortgage?
Were you on a tracker and then fixed, and then at the end of the fixed period they put you on svr?

If you were on a tracker and then fixed, then you have a very strong case as your original contract will have the special condition. I would use that special condition as the basis for the definition of what a "Variable Rate" is.

The text you have underlined is very interesting and I think you have a case, BOI should have spelled it out in clear plain simple english what variable rate the mortgage should return to once the fixed period ended. In my opinion just saying it will return to a variable rate is not definitive enough, particularly when they at the time were using that term to describe a number of different mortgage types.
Hey Toto took the mortgage out in Sept 2005 no special condition. Regarding the variable rate the one on my offer letter dated Aug 2008 stated that the variable rate of 5.5% would be applied to the mortgage automatically if I did not select an offer by Sept 2008 and this 5.5% represented the tracker and not the SVR. Central Bank need to tackling BOI on the wording of Variable Rates as I feel they can use whatever rate suits them and not the customer.
 

todo

Frequent Poster
Messages
264
Hey Toto took the mortgage out in Sept 2005 no special condition. Regarding the variable rate the one on my offer letter dated Aug 2008 stated that the variable rate of 5.5% would be applied to the mortgage automatically if I did not select an offer by Sept 2008 and this 5.5% represented the tracker and not the SVR. Central Bank need to tackling BOI on the wording of Variable Rates as I feel they can use whatever rate suits them and not the customer.
In my opinion BOI are in breach of the Central Banks Consumer Protection code.

Principle 2.6 states "makes full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer"

Your offer letter in August 2008 should have defined what type of "Variable Rate" would be applied.
 

bmkearney

Registered User
Messages
20
Would you do a data protection request on BOI to see what information they have - or do not have as the case may be?

What did your fixed rate agreement say and what did your original mortgage contract say - in mine, with Ulster Bank, for example, it stated that the tracker was for life of the mortgage & did not specify any conditions, such as fixing where you would be at the loss of this tracker rate.

The Ombudsman then found that I should have therefor defaulted on to the tracker rate at the end of the fixed period

If a contract is ambiguous the law favours the party who did not draft the contract as the other party drafting it had every opportunity to put exactly what they required in the contract.
Hey notabene
Thanks I will request freedom of info...because BOI have never reproduced that offer letter of Aug 2008.
 

bmkearney

Registered User
Messages
20
In my opinion BOI are in breach of the Central Banks Consumer Protection code.

Principle 2.6 states "makes full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer"

Your offer letter in August 2008 should have defined what type of "Variable Rate" would be applied.
Exactly...my case is that 5.5%
In my opinion BOI are in breach of the Central Banks Consumer Protection code.

Principle 2.6 states "makes full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer"

Your offer letter in August 2008 should have defined what type of "Variable Rate" would be applied.[/QUOTE

Exactly.
Well in my opinion it does because 5.5% represented the tracker variable rate in the rates box on offer letter but BOI just have variable rate of 5.5% below box as what we would default to if we didn't select a rate ourselves.
 
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