Could the different treatment of existing customers from new customers be the next tracker scandal?

[Brendan Burgess]

A fundamental requirement of the Consumer Protection Code is to treat customers fairly. A lender like KBC who cuts rates for new customers while failing to cut rates for existing customers is not treating customers fairly, in my opinion.

Likewise, a lender is obliged under the CPC to give the potential customer full information on their products. If they don't tell their customers that it is their policy not to pass on rate cuts, then they are in breach of the CPC.

As usual, the Central Bank will do nothing at all about this while it is happening. But maybe after 7 years, they will wake up to it, and order the banks to conduct an expensive review of all customers and refund the customers whom they have overcharged.

That is how they approached the tracker issue. The Central Bank knew about it but took no effective action. Now after all the damage has been done, they are taking real action.

Brendan

 

[44brendan]

A fundamental requirement of the Consumer Protection Code is to treat customers fairly. A lender like KBC who cuts rates for new customers while failing to cut rates for existing customers is not treating customers fairly, in my opinion.

But is this not a standard marketing ploy for most businesses. I.e. Eir offering discounts and free access to pay TV channels for new customers only etc etc...

 

[Brendan Burgess]

They are very clear about it and it usually is for 6 months or 12 months.

KBC don't tell customers and it lasts for the entire term of the mortgage.

ptsb used to give a 1% reduction on the SVR for the first year. I didn't like it, but I wouldn't be as opposed to it as I am to what KBC and BoI are doing at present.

Brendan

 

[gnf_ireland]

@44brendan yes it is, but eir, Virgin and anyone else also clearly states that the standard price of the product is x and this is a 6/12 month promotional price of y, and after which time you resort to price x.

P-TSB also do this where you have a promotional rate for 12 months and then you go back to the base rate price

The issue with the likes of KBC is that they have a single product for LTVx and they dont disclose that this is a promotional price and what you go back to after what period of time. There is a clear difference between a company/bank offering a promotional price versus what KBC do at the moment.

BTW credit card companies also do this with discounted rates for the first x months and free interest on transfers etc, but they tell you what you go back to after how long. Its about transparancy and following the codes which exist

 

[gnf_ireland]

sorry @Brendan Burgess was typing as you were typing

 

[Páid]

Or the EBS who didn't pass on the latest 0.25% rate cut to it's SVR customers but who offer new customers 2% of a mortgage in cash back with no clawback. The SVR customers are essentially subsidising the cash back offer.

 

[trasneoir]

From another thread, it seems like new KBC business is getting en even worse deal - if you sign up with a KBC introductory offer, you are agreeing to a variable, unpublished, arbitrary, and (if they like) personalized rate for the duration of the contract?