Key Post Have you an SVR mortgage with Danske Bank?

Brendan Burgess

Brendan Burgess

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Today, the High Court overruled a decision by the Ombudsman about the SVR on home loans and on investment properties.

High Court tells Ombudsman to look at Danske Bank's rate increase

The loan agreement said that interest rates would move in line with "market conditions".

The Ombudsman had rejected a complaint , but the customer appealed successfully to the High Court which ruled that this term was vague, and the Ombudsman is to rehear the complaint.

if you have a Danske Bank SVR mortgage...
Check your mortgage agreement.
If it contains this wording, lodge an immediate complaint with Danske Bank asserting that they have not moved the rate in line with market conditions.
They will reject your complaint.
Then make a formal complaint to the Ombudsman.

The 6 year limitation
The Ombudsman may well reject your complaint if the rate first moved away from the ECB rate before October 2008 (6 years ago)

However, as the behaviour is continuing, I believe you are still within your rights to complain.

Brendan
 
Very interesting High Court Decision.

A few years ago after losing a number of BTL complaints about interest rates with the Ombudsman, Danske raised home loans by 0.9% arbitrarily. It was done to draw a line under these cases where Investment & Home Loans were charged different rates. Surely this wasn't in line with market conditions? It was done purely to suit the bank. I would love to see this brought back into the open again.
 
I have 2 mortgage agreements for Danske SVR mortgages, they both contain this wording, from 2001 & 2007.

The Ombudsman will definitely reject your complaint if the complaint relates to more than 6 years ago, if this is the case, clearly state that your complaint relates to the previous 6 years only, it will then be within his remit, if successful you will only be compensated for 6 years, but 6 years refunds are better than no refunds.

If this 6 year rule is ever scrapped, you can put in a further complaint for the previous year’s at that time.
 
Are other banks likely to be affected?
Does the same clause about "market conditions" apply in their mortgages?
 
I have a fixed mortgage with danske bank that I started about 3 years ago (fixed period is for 5 years). I assume for the fixed period I wouldn't have a case regarding the interest rate since I explicitly agreed to fix it at that rate? Or does the fact that the rate is fixed change anything?
I do have this clause about market conditions in the contract however.

When I finish the fixed period in 2 years it will revert to whatever the SVR is at that time. Could I make a complaint at that stage I wonder? Rate would be in the region of 5% vs ECB rate of 0.05%....
 
Are other banks likely to be affected?
Does the same clause about "market conditions" apply in their mortgages?
Click to expand...
The high court ruling is only on the danske bank ambiguous clause that they have in their contracts. But some papers are reporting that some banks refer to the ECB rate as a "reference" for their variable rate. Because they now diverge so much you could argue that it is not being used. But that is a separate legal argument and it all depends on the contract and how it's interpreted.
 
Jackman said:
I have a fixed mortgage with danske bank that I started about 3 years ago (fixed period is for 5 years). I assume for the fixed period I wouldn't have a case regarding the interest rate since I explicitly agreed to fix it at that rate? Or does the fact that the rate is fixed change anything?
Click to expand...
You agreed to the mortgage product with an introductory fixed rate period at a rate that was made known to you.


Jackman said:
When I finish the fixed period in 2 years it will revert to whatever the SVR is at that time. Could I make a complaint at that stage I wonder? Rate would be in the region of 5% vs ECB rate of 0.05%....
Click to expand...
I'd imagine you could. The outcome of the ombudsman's reassessment will be known long before then - so you will know whether Danske have a case to answer or not by then.
 
Not just Dankse...

Niall Brady had a piece on this in the Sunday Times this week, saying that AIB, KBC, Ulster Bank and First Active are also affected by this, 'because the terms of their mortgage contracts are almost identical to those of Danske Bank.'

Padraic Kissane, a financial adviser in Dublin, has found similar ambiguities at the three other lenders. AIB's contract says mortgage rates would "move in line with the general movement of interest rates". KBC says mortgage rates "will experience fluctuations reflecting interest rate changes".
First Active contracts say rates may be increased or reduced "from time to time and at any time in line with market interest rates".
Click to expand...

There is no way any of those wordings support the divergence of wholesale rates and the rates they are inflicting on variable rate mugs.
 
In today's Sunday Times, Niall Brady reports that the Ombudsman and Danske Bank are appealing the decision to the Supreme Court.

I am surprised at the Ombudsman's decision.

I can see why Danske must appeal it.

Brendan
 
Danske have no choice but to appeal it considering the implications.
Why on earth is the FO appealing the decision of the High Court?
 
It's possible that they are appealing it for certainty. This issue has arisen in many cases, and they FSO has dismissed all the claims, as far as I know. The FSO probably doesn't mind how the Supreme Court rules, but if they back the High Court, then the FSO will know where it stands.

If it leaves the High Court decision where it is, Danske or some other lender would appeal it or the next decision to the Supreme Court.
 
I am about to start this process as my buy to let SVR mortgage has these conditions in the contract. Is there any information on a template of letter I should send to Danske bank or information on how to apply to the FO?

Has anybody here already gone through this process?
 
Colum, In relation to the overcharging by Danske bank in February 2009 I do not believe you have enough time to start complaining to Danske Bank and proceeding through the FSO as the statute of limitations runs out in Feb 2015 with regard to claiming breach of contract ( 6 years from Feb 2009 ). My advise to you is to go immediately to a solicitor, he can lodge certain papers with the courts which will satisfy instigating legal proceedings under the Statute of Limitations Act, you will then have another 12 months to formulate your case against Danske Bank before you must start legal proceedings. This should not be too costly.

In relation to The ambigious clause in Danske bank's variable rate mortgage contract (Donna and Robert Millar v danske Bank and the FSO refers) this matter has been appealed to the new appeal court by both Danske Bank and shamefully the FSO. The matter will be listed sometime in the new year.
 
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Thanks Fin Crusader, I am sending off a complaint to Danske today anyway to try and get moved to the 'Home loan rate' to see if I can get it through in time. Do you know if what date in Feb I have until?
 
Hi,

I've a svr mortgage with Danske bank that is now administered by Pepper. I'm absolutely fed up with the the way I've been treated by Danske. Some of my complaints are:

1. The ebanking facility had been terminated so I no longer see my mortgage account online . I asked Pepper about this and they said that I would get annual statements . This is not acceptable.

2. I had my current account with danske and availed of a preferential (if you could call it that ) variable rate of 4.35% on the mortgage. I got my annual statement from pepper yesterday and the rate of interest charged is 4.5%. It seems that Danske increased the rate when they withdrew from private banking earlier this year. They did not notify me about the increase. This is terrible behaviour by the bank and I'm wondering if others have similar issues.

3. The bank continues to charge an excessive variable rate despite the reductions on the ECB rate.

I'd like to hear from anyone who has issues with Danske as I think mortgage holders should be treated better. The bank still operates in the Irish commercial market but if this is how they treat their customers they won't succeed in that business either.
 
Look at term 12.4 of your Danske bank mortgage agreement, it states that they can inform you of a rate change in one or more of 4 different ways. If they did not inform you by one of the methods listed Danske bank are in breach of their own mortgage terms.
 
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