Bank of Ireland increase differential on tracker rates

Reply to the comment left by "David Watson" at "12/11/2014 - 07:24":

Hi David,
Can I borow the last bit of your response ?
Although I haven't paid off my loan and it is a BTL the last bit seems relevant.
I will be sending my response by the end of the week.
Tricia

Reply to the comment left by "David Watson" at "12/11/2014 - 07:24":

I have not received a reply from FOS yet - I am very interested in possibly using some of your response letter as well - may we get your permission please.

thanks
Dave

Reply to the comment left by "Dave Riches" at "13/11/2014 - 10:03":

Dave R,
you can use any of my points if they are relevant to you. The more consistent comments the better....
I haven't sent my response yet but waiting Dave Ws OK to use his last part too...

Reply to the comment left by "Tricia Collick" at "13/11/2014 - 10:12":

I have no problem with you using some of my observations on what FOS have over looked. They are factual questions/ statements which hopefully make them see sense...please try and alter the wording slightly so it doesn't look like a copy and paste and relevant to your situation

regards

DW

Reply to the comment left by "David Watson" at "13/11/2014 - 18:27":

ok,will send tomorrow !
Thanks

I obviously don't know the individual circumstances of each case but as a general observation suggest that appeals are most likely to succeed if argued on the basis that on its proper construction the contract does not permit BOI to increase the differential. I doubt if complaining about small print and unspecified vagueness will achieve anything apart from clouding the real issue. This and arguments about their balance sheet only become relevant if it is accepted that its weakness gave them authority to do what they did.

I too have rec’d a rejection letter from the FOS this week, saying that despite the clause being hidden away in the “residential” T&C’s, I am classed as a “professional investor” when it comes to any protection they could have given me- I can’t believe this unbelievable cop out!.

They say that they have examined the BOI financial situation and conclude they are indeed justified in increasing the differential- does this mean that BOI now have carte blanche to do as they please and the increase is applicable forever?-and going up as the base rate rises!!- I’m locked into this mortgage as I can’t change lender so have had to pay up. Since 2003 I have had a family, I currently work part time (day job is not “professional investor” funnily enough- I’m only that when it suits the BOI/FOS!!) and now my salary does not meet the min earning req with other lenders!!

If the FOS are really saying BOI can do this I don’t understand how they can just then walk away – don’t they need to be monitoring and re-checking the situation on an on- going basis? When (if) things have improved/changed for BOI (because thousands of customers like me are effectively bailing them out) they should surely be made to reconsider/reverse their decision (as it would no longer be justified under this magical clause they have dropped lucky with) and go back to the original terms?........yeah right!!.

It seems the FOS have left me high and dry and moving forward BOI are holding me to ransom now and for the whole duration of the mortgage!

I just don’t know what to do next!

Reply to the comment left by "BOI BTL Customer" at "15/11/2014 - 19:21":

Sounds like my letter. I have written a three page email to the adjudicator pointing out factual inaccuracies in his assessment of the issues raised, and his classification of me as a
" professional investor". Plus the FOS can't make its mind up on what Mortgage Conditions were used alongside the mortgage offer permitting the differential to be increased. It's sloppy work from the FOS and clearly bits and pieces of various standard letters stitched together to create a confusing and incoherent reply. I have appealed but don't hold out too much hope.

Hello, I to have received the 'standard' response saying I am professional landlord, they are allowed to increase because of it being in the small print and I should have known. BUT if it was that obvious and clear how come so many customers missed it and it has taken supposedly experts in contract/financial law 18 months to come to such a conclusion. Needless to say I will appeal but it feels a little one sided. Can I have an update on what is happening with the 'group' effort -I am loathed to bother Justin's offices with individual emails when a quick message on hear would reach everyone. But I would like to know if we are proceeding. I have paid in since the start the initial £180, a contribution to the marketing and the last £500. If we are not proceeding, will the last £500 be returned.

If you have a tracker mortgage, I don't think the argument should centre on whether or not the bank's increase of their SVR is justifiable in light of its profitability / the bank's capital position, etc. - ultimately this is just too difficult to prove (also "market conditions" or "market rates" are related more to what other banks in the market are charging and the cost of financing the mortgages, and not central bank rates).

It seems much more solid to focus on the actual conditions (and apologies if this has been stated already elsewhere in 154 pages of comments):

Using the example in the OP:
"6 INTEREST

Charging interest at a tracker rate

(j) Unless we change the differential (if any) under condition 6 (n), we will not change the tracker rate unless the base rate changes.

(m) in condition 6 (n):
– a “positive differential” means a percentage which we add to the base rate to arrive at the tracker rate; and a “negative differential” means a percentage which we subtract from the base rate to arrive at the tracker rate.

(n) We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than seven days written notice. This means that we can change the differential in a way that is favourable to you."

It is very unlikely that a court will find that the above condition allows the bank to increase the interest rate payable:

- IF you are paying Base plus Margin (e.g. currently 0.5% plus 1.25% = 1.75%) then the ONLY change tha bank can make is reduce margin (so in future you have to pay <1.75%)
- the Bank can ONLY increase Margin IF you are paying Base minus Margin (i.e. currently 0.5% minus Margin)

(and the same argument - rather than fairness etc - seems to me to be justified when speaking to FOS).

That is very clear from the above quoted text. What (specific) hidden provisions are there that say differently? Is there anything in the agreement that says which governs in the event of conflict? If there is no such clause, then the interpretation could be unclear and the court may (as stated elsewhere) look at the contra proferentem "rule", etc.