Key Post Ulster Bank refused tracker after fixed rate period -Ombudsman gave it back to me

Discussion in 'Issues with tracker mortgages' started by peteb, Nov 14, 2013.

  1. peteb

    peteb Frequent Poster

    Posts:
    1,521
    Following a request from Brendan I am posting details of my dealings with Ulster Bank, the FSO and the happy return of my tracker!

    History
    I purchased a house in May 2005 and took out a tracker mortgage with Ulster Bank. ECB rate + 1.05%. I also have a UFirst account which I still hold that allowed a slight reduction in the rate offered.

    In October 2006 with rates starting to increase I made the decision to switch to a fixed rate for 2 years. When the two years was up I took a 3 month mortgage holidays as was allowed by the product but was told by the bank I could not select a rate to go back onto until the holidays was finished. The bank had given me a sheet that outlined Standard Variable Rate, further fixed rates and tracker rates. When I contacted the branch later in October 2008 I was told tracker products were no longer available.

    The wording of the fixed rate form stated that if I didnt make a decision I would revert to "Ulster Bank Home Loan rate ........in accordance with General Condition 2 of the Offer of Advance originally accepted by you". And that is the important part for anyone trying to get your tracker back from Ulster Bank

    In October 2011, I realised that I had a case for claiming my tracker back.

    Obviously I had spent over 3 years on the Standard Variable Rate before realising that I shoudl have been entitled to my tracker back.

    My Initial Complaint to Ulster Bank

    I wrote to the bank in October 2011 asking for the return of my tracker. The wording of the letter is below:

    With regards to the above mortgage account I am writing to express my concern that I had in fact been incorrectly placed onto a Standard Variable Rate at the expiry of my fixed period which ended on 31st July 2008.

    I had spoken with a customer service representative who commented that my fixed rate appendix document would have stated that at the expiry of the period I would revert back to a Standard Variable Rate. This is not the case in this instance, and I have attached a copy of said document which states “the Ulster Bank Home Loan Rate shall apply in accordance with General Condition 2 of the Offer of Advance originally accepted by you ”. This rate is noted as being the ECB rate plus 1.05% and I have enclosed a copy of both the Offer of Advance and the Fixed Rate agreement.

    I would therefore request that I be returned to the Tracker product I appear to be entitled to and should this be the case, that any overpayment of interest as a result be refunded.

    If I do not hear further within the next ten working days I will seek to refer this matter to the Financial Services Ombudsman.

    Bank's Response

    Ulster's banks initial response having "looked" into my complaint was to state that they no longer offered tracker mortgages and therefore deemed I was not entitled to it. Any response from them never dealt with the question asked - regarding the contractual entitlement. And I would have to conclude that the process is such to frustrate you to the point that you no longer wish to pursue the matter.

    I must also say at this stage that I have a friend that was in the exact same position and I have drafted letters for them and they were given their tracker back by Ulster Bank without having to effectively run the gauntlet on it!

    My arguments in the complaint to the Ombudsman
    This was simply that:
    - fixed rate authority form stated I would be returned to the Ulster Bank Home Loan rate as per General Condition 2 of the offer of advance
    - that there was no indication definition anywhere in their terms and conditions that stated this was a Standard Variable Rate
    - also that their advice that I could not choose a product till after the holiday voided me choosing a tracker (kind of chancing my arm with
    that)

    Ulster's Banks Defence of my complaint
    The FSO put a series of questions to the bank. The first and main one being
    "In your final response letter you stated that the term Ulster Bank Home Loan Rate refers to the bank's standard variable rate. Was the complainant ever advised of this? If so, when and by what means"

    They argued the term Home Loan, as in the original offer of advance is defined as - money borrowed from bank or similar organisation in order to buy a house or apartment - and therefore this terms is used to describe the mortgage itself.

    "The term home loan therefore is the standard rate applied to a home loan account and is not a specified product like for example flexible mortgage, which is the term used in the complainants offer of advance to describe the original interest product of same. This condition states that the flexible mortgage tracks, the movement of the ECB Base rate with an agreed fixed margin which is fixed for the life of the loan.

    General Condition 2 of the offer of advance stipulates how the interest is applied to an account and what happens regarding interest when the account is redeemed which is why it is referenced in the Fixed Rate authority form.

    If the Ulster Bank Home Loan rate was used to describe a tracker interest rate product this condition would stipulate, that the rate of interest would track the movement of the ECB base rate and any announcement regarding variation to same would be published and announced by the ECB directly not the bank.

    We consider that this element of offer of advance should have been explained to the Complainant by their legaol representatives, prior to acceptance of same and subsequent draw down of loan.

    We do not provide any advice with issuing a Fixed Rate Authority form nor are we obliged to provide same. Therefore, we did not provide the Complainants with a definition of the term home loan rate"


    Other questions included whether I was advised about the cost implications of switching, whether the bank had changed their Fixed Rate Authority Form, and whether they had anything to add to their final reponse letter. I don't think there is any need to go into these answer but if anyone wants to know I am more than happy to oblige.

    The Ombudsman's decision
    He states in his decision:
    "As both parties are relying on the same provision - the Complaniant to bolster his case that he was led to believe on expiry of the fixed rate period, the tracker rate of interest outlined in the offer of advance originally accepted would apply to his loan if no other product was selected; the Bank to support its contention that the Complainant was not informed that his loan would revert to the original tracker rate following the conclusion of the fixed rate term - and in order to make a definitive finding on the matter it is necessary to scruitinise the language used by the bank..."

    He goes onto he found the dual terminology used by the bank confusing and quotes a number of paragraphs that I can include if necessary but in essence he then states

    "While the bank's reponse to my question was both lengthy and detailed, it is the very last sentence of the reply that I consider to the the salient portion [this is where they stated previous that "therefore we did not provide the complainant with a definition of the term home loan rate"] It seems the Complainant was never advised that the Ulster Bank Home Loan Rate is also known as the standard variable rate. It seems to be me that the is nomenclature utilised by the Bank that lies at the very heart of the matter. .............
    ...................I do not believe the Complainant was adequately advised of the fact that the standard variable rate would apply to his house mortgage at the conclusion of the fixed rate period, as opposed to the tracker rate, if he opted not to select an alternative product.

    It is my considered opinion that the terminology used by the Bank in the above quoted paragraph of the Fixed Rate Authority is ambiguous, vague and misleading...............

    .......I find that in view of the discrepancies in the terminology used by the bank and the confusion caused thereby, when the Complainant signed the Fixed Rate Authority, he formed a legitimate expectation that his house mortgage would revert to the tracker rate of 1.05% above the ECB rate, upon termination of the fixed rate term.

    For the reasons outlined above, this complaint has been substantiated. I find the bank acted wrongfully by failing to over the Complainant the option of reverting to the original tracker rate of 1.05% above the ECB rate upon expiry of the fixed rate periof of the 31 July 2008.

    Sorry for the long-windednes of this but hopefully it may help some people. I obviously got this back dated until 2008 which was a large chunk of change of a refund.

    However you also need to be aware in these instance you have may have a liability to Revenue as you would have claimed more TRS than you would be entitled to.

    More than happy to provide the actual documentation to anyone who feels it may be of use to them.
     
  2. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    31,818
    pete

    That is fantastic, thank you very much.

    It will be very helpful to anyone taking a case to the Ombudsman, but in particular, anyone going to UB.


    I have made a few small edits in red for clarity. Are these correct?

    Key lessons for anyone who lost a tracker

    • The argument "we no longer offer trackers" is not a valid argument by the lender
    • If you are told you will revert to the Home Loan Rate or any other wording which does not specify clearly and ambiuously, that you will revert to the Standard Variable Rate, then you have a good argument
    • No matter how solid your case is, you have to be determined to go all the way.
    • It's well worth taking a case to the Ombudsman, but you must argue it well
     
  3. mitzymoo

    mitzymoo New Member

    Posts:
    5
    Thanks for sharing this information Pete. It is most helpful.
    I am currently going through the initial stages of engaging with Ulster Bank to have my tracker rate reinstated. My fixed rate agreement stated that I would revert to the "homeloan rate" as per General Condition 2 of my offer letter when I came off the fixed rate in December 2008. I also had queried this at the time as I was certain that I should have reverted to the tracker but UB were adamant that I was to go on the SVR.

    The main difference with my case is that my loan is for an investment property but I cannot see any mention of this on the offer letter. Ulster Bank were aware at the time that it was an investment property and I took my house insurance out with them which clearly states that the property was for rental purposes.

    Has any reinstatements of tracker rates been for investment properties or solely for owner occupiers?

    I do realise that if I win my tracker back I am going to have a huge Revenue liability but it will be worth handing it over to them rather than allowing Ulster Bank to get away with this practice.
     
  4. Bronte

    Bronte Frequent Poster

    Posts:
    11,971
    Mitzymoo did you ever have a tracker on the investment property? It's not clear from your post.
     
  5. mitzymoo

    mitzymoo New Member

    Posts:
    5
    Hi Bronte.
    Yes I had a tracker of +1.1 over ECB on the main part & there was also a small top up at 0.85 over ECB (based on having a U First account which I still hold)
     
  6. peteb

    peteb Frequent Poster

    Posts:
    1,521
    I don't see any difference to our circumstances. The crux of the decision was the definition of home loan rate and the ambiguity surrounding it. Shouldnt make a difference it was investment property.
     
  7. Bronte

    Bronte Frequent Poster

    Posts:
    11,971
    Peteb that's a brilliant key post on your successful story. Well done on your perseverance, as I've gone done the same route myself with the Ombudsman I know it's no small task to battle on.
     
  8. Ladylouth

    Ladylouth Registered User

    Posts:
    9
    Hi mitzymoo, we got UB tracker back on investment property without having to go to Ombudsman. Have case with FSO now for our own home to get tracker back. Stick with it, it should go your way.
     
  9. mitzymoo

    mitzymoo New Member

    Posts:
    5
    Hi Ladylouth.
    Ulster Bank have reinstated my tracker without having to deal with the FSO which is a major relief. I am still waiting on them to confirm the amount of refund due so I'm hoping it won't take too much longer.
    Thanks to all posters on Askaboutmoney for their posts as without them I'd never have realised I was entitled to it back!
     
  10. bfreckles

    bfreckles New Member

    Posts:
    4
    Hi All,

    I am in similar situation with Ulster Bank, took a U First tracker mortgage in 2005, fixed in 2007 for 3 years - the fixed rate authority referred to reverting to UB Home Loan Rate on expiry if no other product selected. In 2007 I believed Home Loan Rate meant my original U First tracker mortgage, so I fixed believing I would revert to my U First Tracker in 2010 if I didn't choose anything else.

    In 2010 UB offered me alternative products but I refused to select one, demanding my UFirst tracker be reinstated. They refused and I complained in writing but they ignored my letter in 2010.

    Due to personal circumstances I didn't pursue it - I phoned and wrote a few letters but those were not acknowledged by UB. I always knew it would be a hard slog with them.

    So in 2014 I decided to really pursue it with UB. This year I have sent 5 letters and have also registered my complaint by phone - none of these have been acknowledged by UB to date.

    In March 2014 I reported to the FSOB but they can't look at it. Unfortunately because the date of the agreement (moving to fixed rate) was 2007 it is outside of their legal remit.

    PLEASE BE AWARE OF THE 6 YEAR FROM DATE OF AGREEMENT RULE for the FSOB.

    In the UK it is 6 years from agreement or awareness of the breach - the UK recognises mortgage, pensions and life insurance are long term products and therefore the date of breach is also a trigger in the UK but not in ROI!

    So I am back to trying to get it sorted myself - weekly letters plus other actions - such as sending in Data Access Requests, reducing my payments to what I believe it reasonable if I were on a tracker rate, writing regularly to build my cas about how rubbish they are and how they've placed additional unnecessary stress and financial pressure on me and my family..

    I am also considering issuing legal proceedings for their breach of contract and reporting them to the Revenue Commissioner for fraud (overcharging TTRS), contacting the media.

    It seems as though lots of people are having the same issues with UB.

    To anyone who did resolve with UB did you get any additional compensation for interest, inconvenience, stress (other than just the overpayments back)? Did they refund the Revenue Commissioners on your behalf?
     
  11. peteb

    peteb Frequent Poster

    Posts:
    1,521
    No. They Don't give you compensation. They don't consider themselves wrong. And its up to you to square off the Revenue.
     
  12. mitzymoo

    mitzymoo New Member

    Posts:
    5
    Hi bfreckles,

    You need to send a formal letter of complaint to Ulster Bank. Keep all correspondence with them in writing and make sure you keep copies for record purposes. If the complaint is formal then they have to follow guidelines.
    The complaint process takes 40 working days before you can approach the Ombudsman and trust me, they will drag it out to the very last day.

    It is unlikely you will be given any additional compensation but the refund and rate reinstatement.

    Any taxes due must be paid by you to Revenue.

    If you need any more help please ask. If you pursue this through the right channels and your paperwork confirms you should have got the tracker rate back at the end of the fixed rate agreement, you will more than likely get your rate back. Be patient...... It's worth it in the end!
     
  13. bfreckles

    bfreckles New Member

    Posts:
    4
    Thanks peteb I'm currently looking into whether UB have defrauded the govt over ttrs payments as UB is the one who submitted the info to the revenue commission ERS. Research is ongoing but I will try to update when I get more clarity.

    Thanks mitzymoo I have submitted 6 formal letters of complaint to date since 2010 none of which have been acknowledged. Given lack of response I reported to fsob but they only go back 6 years from date of agreement.

    I registered a formal complaint by phone also just received a letter back saying UB didn't sell me the mortgage or fixed rate and the complaints section doesn't deal with complaints re mortgages!!!

    UB did sell me the mortgage n fixed rate so they are being deliberately obstructive! Plus awful customer service but thats no shock.

    The anti UB/give me my tracker back campaign continues!!!
     
  14. rameire

    rameire Frequent Poster

    Posts:
    377
    im unsure of what you mean here.

    with TRS
    the customer is the one who applied for trs.
    the revenue supply the rates and ceilings to the bank
    the bank supply the amount of interest charged to the account also taking into account the rates and ceilings,
    the revenue then provide a sum of money to the bank for the customer which is applied to the mortgage.

    or am I missing something about what you are talking about?
     
  15. bfreckles

    bfreckles New Member

    Posts:
    4
    Hey peteb you are right how it operates to set up.
    I was wondering if there is an angle because it was the bank who falsely advised the revenue about the interest rate being applied to the customer's mortgage.
     
  16. peteb

    peteb Frequent Poster

    Posts:
    1,521
    The bank hasnt provided any false info to revenue. They advise revenue of the interest rates they are applying. At the moment UB are giving them what they consider to be the contractually agreed rate. Just because you dispute it, it doesn't make it otherwise unfortunately.
     
  17. PadKiss

    PadKiss Frequent Poster

    Posts:
    198
    Hi bfreckles another client of mine brought my attention to your post today as i may be able to help. I do not agree that you are outside the 6 year time limit but would need more specific information to be certain. If you could private message me your contact details I will check fully for you but on reading your post i believe you are well within the statutory time line
    Padraic
     
  18. bfreckles

    bfreckles New Member

    Posts:
    4
    I am making some progress with Ulster bank they have not upheld my complaint but they, as an exceptional goodwill gesture, are going to return my mortgage to my ufirst ecb tracker rate and backdate to the end of the fixed rate. A few friends have also in thehad a virtually similar letter.
    Waiting for calculations etc.
    Its a long and frustrating process but you have to be determined to follow it up constantly!
     
  19. SarahB

    SarahB New Member

    Posts:
    1
    Hi,

    Just came across this thread and I had a UB Tracker, fixed for 3 years in 2007 and went on standard variable rate since. I did ask about going back on Tracker but was told no. But I have just found my letter of offer and it has the 'General condition 2...' Phrase.

    Bfreckles - I'm a bit concerned at your 6 year limit comment. Is this correct? Could you post a bit more info please?

    Anyone who managed to get their's reinstated without having to go to the FSO would you mind posting the phrasing of your letter below please :)

    Can I ask did you go direct to the mortgage section or through your bank managers?

    I do have an email from 2011 where I asked my bank manager about going back on my track and he said, 'In relation to going back to a tracker mortgage after coming of a fixed rate, this is not the norm and that certain accounts have this option but it is a very small fraction of our mortgage book.'

    Just wondering who would be best to approach first, the mortgage section or my bank manager?

    Thanks
     
  20. twofor1

    twofor1 Frequent Poster

    Posts:
    1,139


    The FSO can only consider complaints that occurred in the last 6 years, you fixed in 2007 for 3 years, UB put you on a variable rate in 2010, and so 2010 is when the conduct complained of occurred and is well within the 6 year time limit. Should you need to go as far as the FSO, state clearly that 2010 is when your complaint refers to.


    You must follow Ulster Bank’s complaints procedure;

    1. Put your complaint in writing to the manager at your account holding branch. If not satisfied go to step 2.
    2. Put your complaint in writing to UB’s complaints handling centre. If not satisfied go to step 3.
    3. Put your complaint to the Financial Services Ombudsman.

    http://www.ulsterbank.ie/roi/personal/generic/complain/concern.ashx