AIB "I just got a letter from AIB offering me €1,615 and a tracker at 3.32%. What should I do?"

Brendan Burgess

Brendan Burgess

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What should I do?
First of all you can fill in the payment form and get paid the €1,615 without it affecting your right to claim more?

Are there others affected by this?
Yes, around 4,000 AIB customers are getting this letter.

Why did we get it?
There are some slight variations, but the most common case is the following:

You took out a fixed rate mortgage with AIB around 2006.
Your letter of offer contained the following words "At the end of any fixed interest rate period, the customer may choose between a) a further fixed rate b) a variable rate or c) conversion to a tracker at the bank's then prevailing rate"
When your fixed rate ended in 2009, AIB did not offer you a tracker.
They should have done so.

But they are offering me a tracker now at 3.32% - that is higher than my current mortgage rate

AIB argue that while they did not have a prevailing rate back in 2009, if they had had one, it would have been 3.32%

But I thought tracker rates were about 1%?
AIB stopped offering trackers to new customers in October 2008 and the last rate they offered was 1.25%.

The average rate on their tracker mortgage book is probably less than 1%.

So why is the 1.25% not the "prevailing rate"?
Because that is what AIB says it would have been.

They set this rate in 2013 - 5 years after the event.

I have read about other customers getting €20,000 and €30,000 in compensation. Why am I not getting that?
AIB is arguing that if they had offered you a tracker back then and if you had taken it, you would have had higher repayments than the actual repayments on the variable rate or the fixed rate you were on.

Therefore according to AIB "you did not suffer any financial detriment".

Should I accept the 3.32% rate now?
No you shouldn't. It is higher than the other variable rates on offer from AIB.

Can I challenge this 3.32% rate and get a rate closer to 1%?
1) You can appeal to the Independent Appeals Panel
If they reject your appeal, you can either
Go to the Financial Services Ombudsman
or
Take legal action.

If you go to the Financial Services Ombudsman and are unsuccessful, you can't then go to the High Court. (In theory, you can. In practice, you can't.)

So what should I do?
There is strength in numbers. One person needs to take a case to the High Court. If the High Court upholds that case, then the others can take cases of their own as the ruling of the High Court would set a precedent.

User Bungaro on Askaboutmoney has set up a group to take such a case.
Don't spend your €1,615. Send it to the group to fund the legal action. If the action is successful, you should get your money back. You should also get a cheap tracker backdated to when you came off the fixed rate. You should also get compensation for the distress caused by being overcharged.

If you are a user on Askaboutmoney, you can message him via


Padraic Kissane may be getting involved as well
Padraic has focused on other groups in the past and didn't mention the AIB Group when he made presentations to the Oireachtas Finance Committee. But he is taking action now. [broken link removed]


Why is the Central Bank forcing AIB to put these customers on a fair tracker rate?
The Central Bank is well aware of this issue.
Until the Central Bank got involved, AIB was rejecting all claims from these customers on the grounds that they were "not impacted".
At least the Central Bank encouraged AIB to pay everyone €1,615. It is not just the money. This also brings them within the Independent Appeals Panel system and within the Ombudsman system.

Should I see a solicitor or financial advisor?
No. This must not be fought on a case by case basis. Those affected must group together and take a test case.

How much time do I have?
You have one year from the time you received the letter to appeal. So keep an eye on this forum and don't do anything yet apart from filling in the form to claim the €1,650
 
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This is how AIB announced this on 20th December 2017

3. Contractual option of a prevailing rate – customers never on a tracker

· Following ongoing review, AIB has decided that approximately 4,000 customers who were never on a tracker rate will be paid compensation. These customers had the contractual option to choose a prevailing tracker rate at the end of their fixed rate period. However between October 2008 and December 2013, AIB had withdrawn the prevailing tracker rate and as such these customers were not provided with this choice.

● AIB will pay each of these customers compensation of €1,000 plus €615 towards independent advice. They will also have the option for a 12 month period to avail of the bank’s current prevailing tracker rate on a go forward basis and the right to appeal through the independent appeals process.

upload_2018-3-23_14-46-56.png

Update
I asked AIB what their prevailing rates were today and got this response:

"It is 3.32% for PDH customers and 4.32% for BTL customers."
 
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Hi. I got an identical letter with a cheque for 1615 also. I have given a synposis of my case to Pauric Kissane... is this the right move? They offered me 3.32 %
 
Does anybody know how you would join group who may take legal action together against AIB as opposed to me doing so alone?? I got my letter Friday and am totally lost as to what to do next.
 
I have also received this letter (about ten days ago). Took out a mortgage in late 2006, fixed for three years. Will send on my details to bungaro by email. I would definitely like to follow this up. It doesn't appear to be a reasonable settlement.
 
I emailed the email address that was above (although I don't see it now??) but have not heard anything. Is this case with a group going ahead?
 
This thread has gone very quiet. With 4000+ people affected I would have thought there would be lots of posters looking for information, and more updates/input by advisors etc. Am wondering where to turn to, have sent email to Padraic Kissane to seek advice, just wondering if anyone has an update on their own progress or how they are going about pursuiing their case.
Thanks.
 
Yes, I agree. I was also wondering if the group action is going ahead or where do things stand at the moment?
 
Quick question, someone might be able to advise. I've gone through the material that AIB sent me in response to my access request. Nowhere can I see it written that I was entitled to be offered a tracker when my 3 year fixed expired. I don't have the actual terms and conditions booklet, maybe that is where it would be stated?

One thing I did spot is that they did not put me on the lower ltv standard variable rate when my fixed rate expired, whereas my other half split mortgage was on the low ltv, and I had been offered low ltv on the full amount (I ended up splitting, half at tracker, half 3yr fixed). Presume I would have a case for asking them to retrospectively apply the lower ltv rate?
 
Hi Stacey, did you get to submit your appeals form yet? I have been putting it on the long finger for a few months now due to the complexity of the questions and the supporting docs requested to be submitted.
I want to make a start so just looking to the forum to see if anyone has had any response once they sent them in..
Thanks
Ursula
 
Hi, I have also put the appeal of this on the long finger, but have a mission to get it done and sent to them this month. It's in our original mortgage contract, that we should've been offered a tracker once our initial fixed term ended, but we weren't. I managed to contact one of the groups that emerged from these forums (not sure if there is more than one or not), but they said that the group was closed (as in not taking in anyone else). That they'd made no headway as of yet, but they are still working on it, and to keep an eye out on this for updates. I too am at a loss as to what to do, but there's no point in doing nothing either. So I'll do my appeal and go into the bank and start banging on doors.
 
Yes true and the bank want us to do nothing. That's the reason the appeals form is set out in such a way so as to deter people from going any further with it. But the longer its left the harder it is to face into...hope to make a start on mine this week.
 
I also have put my appeals document on the long finger but am hopeful to have it sent this side of Xmas. I’m just confused of correct grammar to use for answers.

Interested to see as anybody submitted an appeal yet?
 
I would use plain English, just outline the facts and how it affected you financially etc. This all happened at a time when people were hit by the recession and WOULD have taken up the tracker option as it was much lower than the variable at the time. Its just not right that a certain group of mortgage holders were penalised in order for the financial institutions to gain from it.
 
How long were people who requested one waiting for the appeals pack to arrive? I called AIB a week ago to request one and have not received it yet.

>>>update: it just landed through the letterbox!
 
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