KBC KBC Tracker to Fixed - Ombudsman rejected complaint

mcaul

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468
Rather than clog a different thread, its probably better to ahve different tracker threads for different institutions.

Following on from comments in the boi thread http://www.askaboutmoney.com/showthread.php?t=154917&page=2

KBC Tracker / Fixed.

In the original, non requested fixed rate instruction the Terms state that fixed rates from x date for term above thereafter reverting to the company's standard variable rate.

Above this it states that the terms are in ADDITION to the t&c's of the mortgage.


In the new fixed rate instructions it has "From date of expiry of the fixed rate instruction your account will revert to the lenders prevailing Standard Variable rate at the time"

Above this it states "then the terms belowshall be binding on me/us and shall amend the existing rate terms & conditions of my/our mortgage"


Quite a substantial change.

1. New instruction Very clear that it amends interest rate tewrms of the mortgage areement and

2. the words Standard Variable commence with capital letters suggesting that it is a specific product.

If the new version had been sent out, I'd bet many people would have looked a lot more closer at the terms and asked questions which would have led many to stay on the tracket rate rather than come off it.
 

mcaul

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468
small update...

I gave all the details to counsel that does a fair bit of work for banks and she said there is a strong case for the mortgage to be reverted back to tracker and suggests that I vigorously contest it.

(cost of advice was large box of chocs - family comes in handy sometimes;) )
 
R

Robanne

Guest
On the subject of contracts for mortgages, i am currently in a world of pain and am now reviewing but to let mortgage documention...recently we came off a three year int only on the invesetment property. We also have a family home with them. They have advised me that if I dont pay mortgage on investment property that they can attach loan to my ppr. Recently they offered us a restructuring - reduce payment on family home and increase payment on investment property. When I looked at the small print there is a new condition which does in fact state this. I checked the original IIB mortgage documentation for both properties and nowhere could I find this condition. Are they trying to pull the wool over my eyes? I am now seeking legal advice as they are refusing to discuss restructuring the mortage over a longer term and I am annoyed. It just goes to show you though that you should really read the small print in any documentation that you sign. Remember KBC are not signed up to the goverment scheme.
 

raglan

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Mcaul,
Did your MFA that you signed state anything about "seeking independent legal advice"? From what I remember ours did.......hope this doesn't have a huge effect overall, as the bank has fallen down on so many other issues but includes this
 

mcaul

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Mcaul,
Did your MFA that you signed state anything about "seeking independent legal advice"? From what I remember ours did.......hope this doesn't have a huge effect overall, as the bank has fallen down on so many other issues but includes this
It has the standard line "We recommend that you seek independent legal advice in connection with this matter"

However I can't see how that can affect any claim to revert back to the standard variable rate @ max 0.95% above ECB - I've given all the details to a barrister (family member:)) who has worked many tmes on behalf of banks and her legal opinion is that my mortgage is a Standard Variable Rate Annunuity Homeloan as per the letter of offer with an initial rate of 2.95% Variable.

No-where in the Letter of Offer does it state that it is a tracker mortage or any other type of mortgage than a Variable Rate Mortgage.

Then in the Special Conditions it states that the Variable Rate will be no more than 0.95% above the ECB rate.

So, in looking at it in ever more detail, I feel more cheated and more determined to get the tracker rate returned, and that no matter what way you look at the paperwork, it should be revert back to the Variable Loan rate of the original mortgage offer and with the same terms & conditions attached. e.g. 0.95% above ECB rate.

If they say that the rate of 0.95% above ECB has been voided, then I can claim other parts of the original document don't apply.


The New fixed rate Terms do state categorically that the fixed rate instruction changes the existing interest rate terms & conditions of the mortgage, so they obviously know that the previous document did not stand up to scrutiny.

I am writing a detailed letter to KBC this week and if their response is negative, the letter along with their response and an official complaint will be lodged with finacial ombudsman.
 

raglan

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Mcaul,
I'll let you know my outcome whenever, its currently with ombudsman awaiting investigation.
 

mcaul

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Had official reply from kbc today saying that rate stays as is. Surprised that in their reply they did not comment on the fact that the original document states the variable rate will never be more that 0.95% above ecb rate. They said I should have taken legal advice when sigkng the docs.

Now its off to ombudsman to get definitive answer.
 

raglan

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A case study from Annual Report from Financial Ombudsman 26th July 2011

6 Switching mortgage interest rates – Tracker Mortgages
The Complainant drew down a mortgage in January 2005 with the interest rate
being the European Central Bank’s rate plus 1% (i.e. a ‘tracker’ mortgage). In late
2005 the Complainant decided to fix the interest rate for a 4 year term. A dispute
arose as to the interest rate that would apply to the mortgage at the end of the
4 year term; the Bank no longer offered tracker rate mortgages and therefore
advised that the Complainant could only avail of its standard variable interest or
a fixed interest rate mortgage.
The Complainant referred the dispute to the FSO. She argued that the
consequences of availing of a fixed rate term were not made clear, through the
documentation or advice received from the Bank. She stated that she believed
she could revert to a ‘tracker’ rate at the end of the fixed rate term and that the
Bank was in effect ignoring the terms of the mortgage. The Bank rejected this and
stated inter alia that allowing a fixed interest rate period was incompatible with the
original ‘tracker’ mortgage agreement.
The FSO examined all the documentation involved, including the mortgage
agreement and the Mortgage Form of Authorisation concerning the rate to which
the Complainant’s fixed rate would revert to upon expiry. The FSO considered
whether sufficient information was made available to the Complainant when
deciding to move from a ‘tracker’ to a fixed interest rate and whether or not the
Bank provided sufficient, clear information to allow her make an informed decision.
The FSO acknowledged the Bank’s commercial discretion to remove ‘tracker’
products from the market. However, having considered the documentation
available at the time of the Complainant opting to move to a fixed interest rate, the
FSO found that she could have reasonably expected to revert to the ‘tracker’ rate
upon expiry of the fixed rate period. The FSO stated that the documentation was
not clear and the consequences (good or bad) of moving from the tracker to the
fixed interest rate for a set term were not sufficiently set out in the documentation.
The complaint was substantiated and the FSO directed the Bank to place the
mortgage on a ‘tracker’ rate backdated to the point at which the fixed interest rate
period expired.
7 Alleged
 
M

Mookie

Guest
Hi raglan

What feedback did you get. Why were you refused?
 

ASK12

Registered User
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14
KBC Tracker - Fixed - Refused Tracker

Hi Mcaul,

Very interested in what you have to say about your circumstances with KBC, I have a very similar scenario with them. Fixed in '07 when I was in a Tracker mortgage, buried in there it had the Additional t&c'S line then beneath that it reads revert to Standard Variable rate. I made no request for that. I've only started to dispute the issue with them and am waiting for their documents in the post today, though they have refused to let me return to my Tracker rate. I fixed for 3 years in May'07 then when no better offer was made I fixed again Aug'10 for 3 years. Has the ombudsman given you a response ?
 

raglan

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72
Hi Mcaul,

Tried to send you an email on other site. Going to someone tomorrow looking for advice as I may have lost chance to appeal.....as didn't do it within 21 days of ombudsman finding....as I thought it'd be mad expensive to do so as money not growing on trees plus that there was no hope, had no idea about costs etc. But it'd be worth it if there is even a chance as I feel there may be hope.

Apparently its up to the high court then if they allow to appeal when 21 days have lapsed. In my case it's a few months.....
 

mcaul

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468
Hi Mcaul,

Tried to send you an email on other site. Going to someone tomorrow looking for advice as I may have lost chance to appeal.....as didn't do it within 21 days of ombudsman finding....as I thought it'd be mad expensive to do so as money not growing on trees plus that there was no hope, had no idea about costs etc. But it'd be worth it if there is even a chance as I feel there may be hope.

Apparently its up to the high court then if they allow to appeal when 21 days have lapsed. In my case it's a few months.....

Got tired with other site - if you did not agree with a moderator, you were baneed for a week even though the moderater was wrong. At least on aam there's a higher level of intelligience and better community spirit.

Yep went through all the t&cs of ombudsman. By using the service, i cannot take any independent extra case against kbc but i can request the high court to rule on a point of law in relation to any final determination by ombudsman.

I believe if it does not go in my favour its really down to one sentence and the exact meaning / time frame for that sentence and that will be my route to high court if needed.
 

mcaul

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468
:(
Final report from Ombudsman today.

Didn't go in our favour.

Reasons

Word "Thereafter" means rate in fixed rate instruction was valid.

"The company's standard variable rate" also is seen to mean published SVO.

The fact that KBC continuosly sent out these fixed rate instructions was not seen as hard selling as there was no follow up phone calls trying to sell it.

The fact that fixed rate instructions are marketly different these days and a lot clearer makes no difference.

The fact that moving to the fixed rate, which then reverted to a SVO would make a big difference in costs and this was not outlined to us, makes no difference either.

It can go to appeal in high court but only on a point of law - will check to see if there's any point of argument, but not hopeful. The only area I see an argument is the duty of the financial institution to make the customer aware of the consequences of fixing for 3 years (15% of loan length) for the remainder 85% time of the loan
 

raglan

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Messages
72
Sorry Mccaul, only logged onto forum, haven't been here in a while. So sorry about your finding as I was hoping someone would get good news. It stinks what they say....totally goes against the code of conduct...one rule for us another for them. Seem in our cases the FSO totally sided with KBC.
 

mcaul

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468
Thanks - seems the word "thereafter" killed the best hope and the fact that they did not follow up fixed rate instruction with phone calls meant that undue pressure was not put on me.
Gave report to sister and she held out only 20% chance of good outcome and estimated costs would be 30k - 50k if case was lost.
I'm on a 3.99 5year fixed at present and mortage is less than 250k, so the figures aren't adding up to taking the risk of the high court costs.
 
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