Success! Ombudsman told AIB to give me my tracker back after fixing.

Florida23

Frequent Poster
Messages
16
First of all I have to commend all the posts on this website. They have been really enlightening regarding my current situation. My situation is very similar to Harvest Moon’s situation on a previous thread.I took out a mortgage with AIB in 2007 with the rate in Year 1: ECB + 0.6% and thereafter ECB + 1.1%. I then decided to fix it a year later for 2 years as I thought interest rates were going up. When I came off the fixed rate AIB wouldn’t put me on a tracker rate because “the Tracker Rate is no longer a product offering by the bank and was discontinued on 10th October 2008.” At the time I queried this with a few people but the general consensus was I had no comeback due to my taking out a fixed rate. Upon further investigation of the original letter of offer of mortgage loan I noticed the following under the general terms and conditions of offer of mortgage loan:

"At the end of any fixed interest period, the Customer may choose between:
(a) a further fixed interest period, or
(b) conversion to a variable interest rate Mortgage Loan
(c) conversion to a tracker interest rate Mortgage Loan
at the bank's then prevailing rates approriate to the Mortgage Loan. If the customer does not excercise this choice, then the Mortgage Loan will automatically convert to the variable interest rate Mortgage Loan."

As per the (c) above I should have been offered the option of a tracker rate as per original contract at a margin of 1.1% above the ECB rate. Anyway I’ve sent a letter of complaint off to the mortgage centre explaining that I will take necessary steps via Ombudsman or Legal unless they reinstate my tracker . I’m awaiting a response and I will keep you posted on developments.
 

Florida23

Frequent Poster
Messages
16
Thanks Dr, I have all my documentation in order.I received the final response letter from the Head of Customer Complaints which came back negative as expected.They've based their case on two points:

1."The term 'prevailing rates' means the interest rates then current and available at the date that a customer's fixed rate period expires.The Bank discontinued providing tracker rates to customers in October 2008.Accordingly,on expiry of your fixed interest rate the Bank was only in a position to offer rates that were currently available,being the Bank's prevailing rate on expiry of your fixed rate so could not be offered to you."
2. "Furthermore,in the Bank's letter dated .....,it stated that your monthly repayments would be revised 'in accordance with the rate then applicable' I note that you state that when you fixed your mortgage, you were not advised you would be unable to return to a tracker rate on expiry of the fixed interest rate.As the tracker rate was still a prevailing rate at that time (having only been discontinued in October 2008) no such advice could have been given.However,there was no indication or guarantee given in the Bank's correspondence that the tracker rate would be available upon expiry of my your fixed rate which is consistent with clause 3.2 referred to above."

Clause 3.2 is

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


It all comes down to how this paragraph above is interpreted.I now pass the final response letter onto the Ombudsman with my comments.Any thoughts or pointers would be appreciated!​
 

PadKiss

Frequent Poster
Messages
215
Hi Florida this as you mention is the critical paragraph in your complaint and i believe that there is merits from both sides but i would choose words carefully on how its presented to the Ombudsman's Office. I feel its important to mention that the intention when this loan offer issued was that your tracker was set for the life of the mortgage and it is only with the subsequent events in the whole banking area that these lenders are trying to keep as many of their customers from returning to their tracker rates. The prevailing rate for tracker mortgages continues to be available but only to those who are currently on tracker rates so is a sense it is incorrect of AIB to say this prevailing rate is not available. It would be more accurate if they said that they are chooosing not to make it available to customers who have and are exiting their fixed rate term. Hope this helps but if you need to correspomd directly you can email me on info@kissanefs.com Good luck
 

Florida23

Frequent Poster
Messages
16
Thanks Padraic. I may well take you up on that. I made the following points in my original letter of complaint to the bank:
1. The contract pre dated any withdrawal of the tracker from the market and as it is a signed contract AIB is legally obliged to honour it regardless.
2. There are thousands of customers on trackers at the moment. The argument that the tracker "product" is no longer on the market is not true.
3. At the time, the consequences of availing of a fixed term rate were not made clear to me through the documentation or advice received from AIB. I believed I could revert to a tracker rate at the end of the fixed term. I believe AIB is in effect ignoring the terms of the mortgage as per the original letter of offer.
4. It has come to my attention that people who were in a similar situation to me (i.e. initially had a tracker and then fixed) have had their tracker rate reinstated having initially been denied.
5. I will take all necessary steps via the Financial Ombudsman or Legal if you don’t agree to a reinstatement of my tracker rate.
6. I will also be pursuing a refund of the difference in the interest rates as a result of being denied the tracker and a description of the calculations.

To resolve this I will make the following points to the FSO:

1. Apply the correct interest rate (ECB + 1.1%) and monthly repayment when I came off the original 2 year fixed rate as per the original letter of offer and to recalculate what the balance should be today.
2. Issue a new set of statements from the time of the interest error up to today. If I’m happy with these statements then this will be my new balance going forward.
3. Reinstate my tracker rate (ECB+1.1%) with immediate effect without me having to pay a breakage fee on the fixed rate I’m currently on as I wouldn’t be on this rate if it wasn’t for their mistake in the first place.
 

ulidia

Registered User
Messages
1
excellent, well done

do people now still think the banking business is built on trust between the parties ?

in somewhat similar position, only discovered this week we have claim for tracker by reading this site
mortgage contract reads per florida above, ie option of tracker at end fixed interest period
original mortage taken out 2007 variable, then fixed rate after couple months for 5 years
on expirary june 2012 bank letter letter offers only choice fixed rate or if not taken goes to variable, which they did as we did not reply
no mention tracker option per loan contract
I have loan contract, my letter instructing fix rate, their reply agreeing and stating after expirary of fixes rate loan will be revised at " appropriate rate "

whats my chances ?
any suggestions please



about to write bank seeking explation why not put on tracker and follow up wherever the process takes me

well done again
 

Florida23

Frequent Poster
Messages
16
Hi Macey

If I were you I wouldn’t bother with the mediation step. This is just another way for the bank to keep you on the long finger and not return your tracker. Look for a decision from the Ombudsman.

From receiving the Final Response letter from AIB to a ruling from the FSO the whole process took about 3 months. The FSO were very professional and punctual in their dealings with me and if you’re unclear about anything I would get onto them.

From my own experience I would say that only the most perseverant will prevail. The banks are definitely using the FSO to filter out the noise. There must be hundreds if not thousands who are in the same position as me but when the bank tells them they’ve no chance of getting their tracker back they believe them. I was like that for a while but this forum wizened me up to what was going on. I wouldn’t believe one word the bank tells you. The bank denied my right to the tracker right up the FSO decision and then once the FSO made its decision they put me back on a tracker and paid my refund almost immediately. It was if they knew they were in the wrong all along. I’ve been a loyal customer of the bank for over 30 years and I foolishly thought that this counted for something. There will be people who will read this and criticise me for what I’m saying but that’s fine. This has been my experience and you can take it or leave it.

Florida
 

Arthur

Registered User
Messages
3
AIB Tracker

Hi all,

I am in exactly the same boat as Florida and Harvest Moon. I took out a tracker with AIB in 2007 and fixed for 3 years in 2009. I was only offered variable or fixed when the fixed term expired and have been on a variable rate since. I have the original letter of offer which stipulates our tracker as 1.1% over the ECB and my general ts&cs also has clause 3.2 which states we should be offered the choice between tracker, fixed or variable at the end of any fixed term. I think I've a strong case to get my tracker back. However, I'm nervous of doing this myself as I have no experience in legal matters and i don't want to risk making a mistake (i've made enough costly property mistakes already!), however, I also think it's really unfair for me to have to pay a financial advisor to do this for me - I believe the cost will be in the region of €1k for a successful result. I think the Ombudsman should make the banks pay any costs incurred by customers to get back what was theirs in the first place (but I'm sure that'll never happen). In the meantime, would any of the people who've challenged AIB and had successful outcomes share the wording they used for their letters both to the bank and the ombudsman for others to use too? I would greatly appreciate the help.
 
Top