Key Post Success Bank of Ireland/ICS puts 2,096 fixed rate customers back on trackers

Booter

Frequent Poster
Messages
207
I know there are countless threads dealing with this issue, however I thought I'd post my experience (ongoing) with my mortgage provider, BOI, which is the subject of a complaint to the Financial Ombudsman.

The facts are:

1. Mortgage agreement taken out 5 years ago[i.e about August 2005] , at a variable rate. A special condition of the agreement limits this "variable rate to no more than ECB Repo +1.05% for the life of the loan" (no mention of the term "tracker")

2. Entered 3 year Fixed agreement some months later, by way of an MFA (Mortgage Form of Authorisation) which stated specific terms and conditions. None of these conditions dealt with the rate to be applied upon expiry of fixed rate, or altered the original special condition mentioned above. The final condition contained within the MFA specifically stated "save as set out in this agreement, all other Ts & Cs of original agreement remain unchanged"

3. Upon expiry of fixed rate period, BOI refused to offer rate as set out at 1 above. They cite a seperate General condition of the original agreement, which provides that upon expiry of any future fixed rate, the rate on offer "would be a variable rate"

4. I have argued that these two conditions should be taken in conjunction, and that they are perfectly compatible. The result being that the rate should
a) Be a variable rate, and
b) Be a variable rate limited to ECB repo +1.05%
thereby satisfying both conditions at issue.

5. The bank argues that only the condition at 3 above is valid, and dismisses that at 1 above as having been "supplanted" by the fixed rate MFA.

After much correspondence and delay (with the bank), and subsequent complaint to the Financial services ombudsman, I have just received an offer of mediation which I will probably accept.

I'll post the outcome here for information purposes.
 
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Booter

Frequent Poster
Messages
207
Major development in this matter...

The Bank have written to me as of yesterday, offering to re-instate the original tracker rate from the date our fixed rate expired ie 13/03/2009. (There was a bit of jumping and fist pumping in our house yesterday morning!)

The letter itself is something of a strange one, in that it does not refer to our complaint to the Financial Ombudsman, with which we are so very far advanced. Instead it purports to be acting in response to our "request for a change of rate". Whatever.
I have confirmed with the ombudsman's office that they did however send them a copy.
Somewhat bizarrely, the "offer" appears subject to us signing a new MFA, rather than simply conceding that the rate on offer should always have been available anyhow. They even had the brazen cheek to issue a summary 10-day deadline for return of the MFA! Gas, they are.
Further, no mention is made of the money we are owed on foot of the overpayments we were, in essence, forced to make.
Anyhow I'll be ringing them later today to seek clarification of these issues.

I do hope that this positive result for us gives hope to anyone else who is going through, or considering going through a similar process of complaint with their financial institution. If your case is sound, as ours always was, they'll concede in the end!
 

Brendan Burgess

Founder
Messages
37,445
The Bank has put around 2,000 people in this situation back on tracker mortgages

http://www.independent.ie/business/personal-finance/property-mortgages/bank-of-ireland-forced-to-put-customers-back-on-trackers-2639252.html

BANK of Ireland has been forced to put more than 2,000 customers back on tracker mortgages and compensate them, the Irish Independent has learnt.



The homeowners had opted to move from trackers to fixed rates, but the bank had failed to observe Central Bank rules about the need to warn the customers of the cost implications of giving up a tracker.
Those who completed their fixed-rate period were put on to a variable interest rate -- but they would have been very unlikely to change had they known the cost difference between a tracker and variable rate.



Review
Now it has emerged that a review by the Central Bank found that 2,096 mortgage holders at Bank of Ireland and its mortgage subsidiary ICS were not given enough information by the bank about the cost of giving up their trackers when they sought to lock in to a fixed rate.


Compensation of up to €2,000 per customer will now be paid to those who switched from a tracker to a fixed rate and the customers will be able to return to their tracker rates.


One customer explained on askaboutmoney.com that he had a tracker set at 0.95pc above the ECB rate. This means he was paying an interest rate of 1.95pc. The homeowner fixed for three years and at the end of this should have been allowed to return to the tracker. Instead the bank put him on a standard variable rate of 2.7pc.
 

thedaras

Frequent Poster
Messages
813
Hi,Im confused.. Can I ask if those involved ,had a tracker from day one of their mortgage?

Or were they on a tracker at some stage of their mortgage and then moved to a fixed rate?

Or for example does this mean that anyone who has this;

1. Mortgage agreement taken out 5 years ago, at a variable rate. A special condition of the agreement limits this "variable rate to no more than ECB Repo +1.05% for the life of the loan" (no mention of the term "tracker"
)


Could potentially be entitled to a tracker?
 
J

JoeB

Guest
The bank should 'track' the rate specified.. the word 'tracker' isn't really that important (in my opinion, although it is a strong word),.. as the rate of 'ECB Repo + 1.05%' is a rate that tracks another rate, so it is a tracker in actual fact.

The only way I can see the bank denying customers that rate is if the ECB dic-continues the ECB Repo rate, whatever that is. If the Repo rate exists, then the interest charged should be ECB Repo + 1.05, as per the contract. If the ECB Repo rate is discontinued and ins't replaced, then the bank is off scott free.
 

paperclip

Frequent Poster
Messages
336
Well done , your persistence has paid off.
Hopefully others who are in the same position will be inspired.
I am indeed inspired... I asked to revert back to my origional tracker after a 3 year fixed and was told it would change to a variable... never even thought of contesting it, til now.

Seems like a lot of red tape and jumping through hoops, but worth it if you can win.

OP, let us know if they pay you what you over paid.

Good on ye!
 
K

Kieran86c

Guest
Hi Booter, I am in the exact same situation as you were right now. My case is at adjudication stage with FSO and the Bank has made settlement offer to return mortgage to tracker rate and refund difference. However they want me to sign a new MFA form and wont tell me what refund amount is or how calculated.

Did you accept the offer and sign the new MFA form or did you continue the case with FSO.

I am considering continuing the case as I believe I should be reverted to tracker rate without signing a new MFA (which clearly states this time that it takes precedence over original loan agreement).

Appreciate your comments as to how you finished up?
 

Knuttell

Frequent Poster
Messages
704
Hi Booter, I am in the exact same situation as you were right now. My case is at adjudication stage with FSO and the Bank has made settlement offer to return mortgage to tracker rate and refund difference. However they want me to sign a new MFA form and wont tell me what refund amount is or how calculated.

Did you accept the offer and sign the new MFA form or did you continue the case with FSO.

I am considering continuing the case as I believe I should be reverted to tracker rate without signing a new MFA (which clearly states this time that it takes precedence over original loan agreement).

Appreciate your comments as to how you finished up?
Hi Kieran,you need to talk to the senior investigator handling your particular case,he will have been copied on all correspondence.

In my case they threw in the towel before the Investigator made a judgement,they sent me out a new MFA,the wording about taking precedence appears on all MFAs,in order for them to revert you to the Tracker you have to sign the form,there should only be one option to tick and it should be exactly at the rate you had before they resorted to their underhanded machinations.

I found with ICS that the refunded very last cent owed me,you have won the war I would advise ICS in writing that you want all monies refunded,consult with the Investigator and sign the MFA.

Personally I see no point in continuing on with the case,its very unlikely the Ombudsman will rule against you but you just do not know,take the offer get you money refunded and leave it at that.

You Won,well done on that score by the way.
 

Booter

Frequent Poster
Messages
207
Hi Booter, I am in the exact same situation as you were right now. My case is at adjudication stage with FSO and the Bank has made settlement offer to return mortgage to tracker rate and refund difference. However they want me to sign a new MFA form and wont tell me what refund amount is or how calculated.

Did you accept the offer and sign the new MFA form or did you continue the case with FSO.

I am considering continuing the case as I believe I should be reverted to tracker rate without signing a new MFA (which clearly states this time that it takes precedence over original loan agreement).

Appreciate your comments as to how you finished up?
Hi Kieran86c
I haven't visited this thread for a while, so apologies for not replying earlier.
Anyway, when I received my new MFA with the 10 day deadline, and no mention of refunds, I rang the customer services dept. which issued it , and my own branch to query this. Neither had any record of the letter!. After a few frustrating days I insisted on speaking directly to the head of the customer services unit (John something), and was eventually put through. He stated that he did not usually take such calls, however when I explained that no-one in the bank seemed to have any knowledge of the offer they'd made me, he agreed to speak with me, and thankfully "had my file on his desk". Anyhow, he was very helpful and agreed to re-issue the new MFA without the 10 day deadline, and with a full breakdown of monies to be refunded.

No further hitches after that, I think I had the money in my account about 1 week later.

On a sidenote, I notice that in discussing cases like mine (and yours) the media and banks sometimes refer to such refunds as "compensation" - is anyone else annoyed at hearing it described as such? They are doing no more than refunding money which they incorrectly took from me, and without a penny interest applied for the period they had the use of it.
 

easy rider

Frequent Poster
Messages
81
Recently my mortgage was up for renewal as my 2 year fixed rate was expiring, before that I had a fixed rate of 2 years also and a year fixed before that.

I never took up the offer of a ECB Tracker Variable back in 2004/2005. However in May this year BOI sent out the expiry letter of my fixed mortgage rate offering the new rate, fairly standard stuff.... but this time they were offering a ECB Variable rate + 1.25%.

I have looked over old letters from BOI when my previous rates expired, but they never offered me a tracker after I originally went fixed all those years ago. I have since taken up the offer of the tracker, however I am wondering if I should follow up with them as to why they are only offering me the tracker now and if they should have offered it previously (I would have taken it two years ago), why they have not compensated me to that affect?

Is this something I should pursue?
 

Nomansland

Frequent Poster
Messages
70
I took out my first mortgage in June 2003 with BOI. I was on a 1 year fixed rate until June 04. At this point I went onto a tracker mortgage until June 06. In June 06 I switched to a 3 year fixed rate mortgage. I came off this in June 09 and was placed on a standard variable rate mortgage until July 2010. In July 2010, we moved house and took out a 3 year fixed mortgage. My questions are as follows.

1 - When I came off the 3 year fixed on the original mortgage in June 09, should I have been placed on a tracker mortgage at this point. If so, am I entitled to a refund here.

2 - If I should have been placed back on a tracker mortgage here in June 09, I presume that tracker would automatically have ended the moment I drew down on a new mortgage in July 2010. Basically, I presume there is no way that I am entitled to be put on a tracker now, due to the fact that I moved house in July 10.

Thanks in advance.
 
L

Levi

Guest
I will be out of my fixed rate in April with BOI and they mention REPO rate however there is a sentence in the contract stating that 'In the event that, or at any time, the repo rate is certified by the Lender to be unavailable for any reason the interest rate applicable to the Loan shall be the prevailing Home Loan Variable Rate' I was just wondering Booter, was this clause in your offer?? Thanks


I know there are countless threads dealing with this issue, however I thought I'd post my experience (ongoing) with my mortgage provider, BOI, which is the subject of a complaint to the Financial Ombudsman.

The facts are:

1. Mortgage agreement taken out 5 years ago, at a variable rate. A special condition of the agreement limits this "variable rate to no more than ECB Repo +1.05% for the life of the loan" (no mention of the term "tracker")

2. Entered 3 year Fixed agreement some months later, by way of an MFA which stated specific terms and conditions. None of these conditions dealt with the rate to be applied upon expiry of fixed rate, or altered the original special condition mentioned above. The final condition contained within the MFA specifically stated "save as set out in this agreement, all other Ts & Cs of original agreement remain unchanged"

3. Upon expiry of fixed rate period, BOI refused to offer rate as set out at 1 above. They cite a seperate General condition of the original agreement, which provides that upon expiry of any future fixed rate, the rate on offer "would be a variable rate"

4. I have argued that these two conditions should be taken in conjunction, and that they are perfectly compatible. The result being that the rate should
a) Be a variable rate, and
b) Be a variable rate limited to ECB repo +1.05%
thereby satisfying both conditions at issue.

5. The bank argues that only the condition at 3 above is valid, and dismisses that at 1 above as having been "supplanted" by the fixed rate MFA.

After much correspondence and delay (with the bank), and subsequent complaint to the Financial services ombudsman, I have just received an offer of mediation which I will probably accept.

I'll post the outcome here for information purposes.
 

Booter

Frequent Poster
Messages
207
I will be out of my fixed rate in April with BOI and they mention REPO rate however there is a sentence in the contract stating that 'In the event that, or at any time, the repo rate is certified by the Lender to be unavailable for any reason the interest rate applicable to the Loan shall be the prevailing Home Loan Variable Rate' I was just wondering Booter, was this clause in your offer?? Thanks
Hi Levi,

Yes that clause, or a very similar one was included in the new MFA. I was concerned about it, and posted on here (somewhere); it was pointed out to me that its a standard clause. In fact when I checked the original MFA I was quite surprised to find that it had been there all along.
 
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