AIB "Does the AIB announcement on prevailing rates apply to me?"

Brendan Burgess

Founder
Messages
39,145
A lot of people have asked questions about whether they are covered by yesterday's announcement. I will try to answer them systematically.

Please do not ask questions about any other issue in this thread - they will just be deleted.

First of all no scheme has been announced. AIB has made a provision of €300m and notified the stock exchange accordingly.

This is what AIB actually said in their press release:

"following a preliminary decision issued by the Financial Services and Pensions Ombudsman,
the Board understands that redress may be due to a previously identified group of customers
who had an option of a prevailing tracker rate."

This ruling which is still covered by the Ombudsman's confidentiality rules arose in a case which I submitted on behalf of a borrower.

The group has been clearly identified before and meet the following requirements.

  1. You are a customer of AIB - not EBS or any other bank
  2. You had clause 3.2 in your contract
    3.2 FURTHER FIXED INTEREST RATE OPTIONS/CHOICE

    At the end of any fixed interest rate period, the Customer may choose between:
    (a) a further fixed interest rate period, or
    (b) conversion to a variable interest rate Mortgage Loan, or
    (c) conversion to a tracker interest rate Mortgage Loan,

    at the Bank's then prevailing rates appropriate to the Mortgage Loan. If the Customer does not exercise this choice, then the Mortgage Loan will automatically convert to a variable interest rate Mortgage Loan.
  3. You had fixed your mortgage rate
  4. At the end of the fixed rate, AIB did not offer you the option of conversion to a tracker interest rate
If you meet these criteria, you should be covered any revised redress scheme.

If you meet these criteria, you should have received a letter back in 2018 (or possibly 2019) with a cheque for €1,615 and an apology for what AIB classified as a "service failure".

We carefully selected the customer whose complaint we took to the Ombudsman so that there were no special circumstances which might allow AIB to claim that the Ombudsman's ruling applied to her and could not be applied to anyone else as her circumstances were different.
 
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Brendan Burgess

Founder
Messages
39,145
You will not be included in this group if

  1. You are a customer of EBS or any other bank
  2. You did not have Clause 3.2 in your contract
  3. You did have Clause 3.2 in your contract but AIB offered you a tracker rate when your fixed rate ended. This was either because your fixed rate ended before October 2008 or after 2013 when they reintroduced the prevailing rate.
If you did not receive a letter from AIB in 2018 or 2019 with a cheque for €1,615, it is very unlikely that you are going to be covered by this.
 
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Brendan Burgess

Founder
Messages
39,145
It has been argued that every case is different and that within the prevailing rate group, there are different cohorts.

I don't agree with this and I would be very surprised if the Central Bank allowed AIB to exclude some people who met the above criteria based on some other criterion.

For example, as far as I am concerned, the following factors are all irrelevant and these customers should be covered
  • Customers who drew down their mortgage after October 2008 when AIB had stopped offering trackers to new customers. If they had clause 3.2 in the contract and they were not offered the prevailing rate, then they should be covered
  • Customers who were offered a tracker mortgage when they drew down their mortgage but changed their mind and drew down a fixed rate mortgage instead
  • Customers who sold their home recently
I don't think that if you would otherwise qualify for the scheme, that any of the following factors will exclude you:

  • You cashed the cheque back in 2018 but did nothing else
  • You did not cash the cheque back in 2018
  • You appealed to the Independent Appeals Panel and were rejected
  • You did not appeal to the Independent Appeals Panel
  • You complained to the Ombudsman in the past and your complaint was not upheld
  • You complained recently to the Ombudsman
  • You have not complained to the Ombudsman
  • You have since switched to another lender
AIB staff members

Being an AIB staff member on its own is not sufficient to exclude you from this cohort. However if you subsequently changed your mortgage contract, it might not be as clear cut. I just don't know as I have not studied the documentation. It is being discussed in this thread:

 
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Brendan Burgess

Founder
Messages
39,145
I have no idea what scheme the Central Bank and AIB might agree to offer customers but the redress could include any or all of the following factors:

  • The amount of the mortgage
  • The date the fixed rate ended
  • The interest rate charged since the fixed rate ended e.g. fixed or variable
I do not think that people will have to make individual claims unless they are claiming additional losses caused by the financial hardship arising from the breach of contract.
 
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joestrand

Registered User
Messages
17
Once again many thanks Brendan for your work on this

Do you know the exact dates this clause was included in AIB contracts

There were several versions of AIB mortgage terms and conditions between 2002 and 2008 when AIB ceased offering trackers

I haven’t been able to get a precise answer to this question

This is important as otherwise customers will have to depend on AIB to identify if they are affected

I asked AIB for a copy of all documentation pertaining to my mortgage and have received documents with letters of offer but without terms and conditions

There was a delay drawing down mortgage as it was a self build and thus I actually have 2 letters of offer but no terms and conditions attached
 

David_Dublin

Frequent Poster
Messages
481
Brings up an Interesting question @joestrand - will there be many mortgage holders that weren't in the €1615 group that should have been included in it, and should be covered by yesterday's announcement.

And the reverse of this, will there be any in the €1615 group that will not end up covered by yesterday's announcement.
 

Brendan Burgess

Founder
Messages
39,145
I don't know the dates. This is what you are looking for.

PART4

GENERALTERMS AND CONDITIONS OF OFFER OF MORTGAGE LOAN

(THE HEADINGS IN THIS PART ARE FOR EASE OF REFERENCE ONLY AND SHALL NOT CONSTITUTE A LEGAL INTERPRETATION.)


Surely your solicitor has them?

Brendan
 

CiaraCostello

New Member
Messages
1
Statement released by AIB this morning.

AIB GROUP PLC – TRACKER MORTGAGE PROVISION UPDATE

AIB Group plc (“AIB”)advises that following a preliminary decision issued by the Financial Services and
Pensions Ombudsman, the Board understands that redress may be due to a previously identified group of
customers who had an option of a prevailing tracker rate.

The Board recognises that there is a range of possible outcomes and has created a provision of €300 million
which will be taken in full year 2019 financial results.

The Board also recognises it is in the interests of the
Group, our customers and our other stakeholders to bring this matter to a resolution and discussions are
ongoing with the Central Bank of Ireland with regard to potential appropriate treatment of this group of
customers.


-ENDS-
4 FEBRUARY 2020
Hi Brendan,

I received the letter and the compensation of 1,600 a couple of years ago. I called AIB to get appeal forms but they were so vast and complicated I never appealed, thought I would just upsetting myself and getting no where. If you did not appeal would you still be in scope for refund?

Kind Regards
Ciara
 

joestrand

Registered User
Messages
17
I don't know the dates. This is what you are looking for.

PART4

GENERALTERMS AND CONDITIONS OF OFFER OF MORTGAGE LOAN

(THE HEADINGS IN THIS PART ARE FOR EASE OF REFERENCE ONLY AND SHALL NOT CONSTITUTE A LEGAL INTERPRETATION.)


Surely your solicitor has them?

Brendan
Solicitor doesn’t have them
Was a self build and ultimately mortgage was split in to several mortgages
If you or anyone else can get dates this set of terms and conditions applied to AIB mortgages that would be very helpful
Thanks
 

reggie3234

Registered User
Messages
31
Ask the bank for missing parts ie part 4 highlighted above, same thing happened to me and others here when I asked for full contract copy
 

Lady Jane

New Member
Messages
4
Sorry I know it’s a very specific question but we are about to sell our house. Would you advise holding off until there is further clarification from aib . Would having sold the house impact any compensation.
 

Brendan Burgess

Founder
Messages
39,145
Hi Jane

I would have thought that if a house move is right for you, then you should do that. You shouldn't let this determine it.

In particular if you are just about to put your house on the market, I would have thought that AIB will have made an announcement well before you would have found a buyer and exchanged contracts.

If you are moving and getting a new mortgage, it might be best to get that mortgage from AIB rather than switching to say Bank of Ireland.

Brendan
 

SadieG83

New Member
Messages
4
Hi Brendan
We received the cheque in 2018. Does that mean that everyone who got that cheque could or should be included if something is to come of this announcement.
 

Robbie R

New Member
Messages
5
Hi Brendan,

Firstly, congratulations on the big news!

I was hoping to get your thoughts on my case. I meet criteria 1-3 but no.4 is not clear cut. I have an AIB mortgage, have clause 3.2 and I fixed for a period which ended in Nov 07. When the period ended I received a letter saying that my fixed rate had ended and that SVR would apply in the absence of a reply, but may be revised to any fixed rate available in the future. It goes on to say that if I want to avail of a fixed rate to complete the attached tear-off section and return. The complicating factor is that they included a sample set of AIB rates on the letter that does include Tracker rates, although they are not explained, there is no mention of what the margin or ECB rates are and most importantly it doesn’t say that I can avail of one of these rates, it only mentioned that I can avail of a fixed rate. AIB rejected my complaint in Apr 18 and I haven’t taken it further. Do you think it merits pursuing? Happy to share a copy of the letter if that helps.

Many thanks,
Rob
 

Brendan Burgess

Founder
Messages
39,145
I fixed for a period which ended in Nov 07.
You are not covered by this scheme.

You were offered a tracker mortgage at the then prevailing rates but did not avail of it.

You might have a case that the documentation was not clear but that is completely separate. You should make a complaint on it to the Ombudsman.

Brendan
 

Robbie R

New Member
Messages
5
You are not covered by this scheme.

You were offered a tracker mortgage at the then prevailing rates but did not avail of it.

You might have a case that the documentation was not clear but that is completely separate. You should make a complaint on it to the Ombudsman.

Brendan
Thanks Brendan, appreciate your input.
 

Olive7

New Member
Messages
1
Thanks so much
Olive

I don't know the timescale. I am sure that AIB will want to get this done and dusted as quickly as possible. However, nothing happens quickly with the Central Bank involved.

It would be safer to stay with AIB for the moment. There might be no advantage, but there could be a disadvantage in moving.

Brendan
Thanks so much will not do anything yet.
 
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