Bank of Ireland increase differential on tracker rates

Possible angles of attack:-

Unfair contact terms

1) Mortgage sold as a tracker at a margin over base rate
2) Margins not adjusted previously
3) Incentive to move offered with no mention of intention to change margin
4) Terms relied upon by the bank being not clear, not fair and apparently misleading
5) Irish Nationals not being subjected to the increased margin
6) Ambiguity of whether the "differential" actually applies to the tracker margin
7) Contract terms being relied upon not being allowed post FSA regulation of mortgage lending in 1994

This morning I have invited 1,000's of landlords to look at this thread and to join The GOOD Landlords Campaign in order to build a fund to obtain initial legal advice on the structure of complaint letters to the BOI and the Financial Ombudsman Service.

Please spread the word and if you receive that email please forward it on to any other landlords you know.

Today we are fighting Bank of Ireland, if they are allowed to win, will other mortgage lenders follow their lead?

I'm not affected personally today but I'm taking up this fight because tomorrow is another day.

From the FSA''

Dear Mr XXXX

Thank you for your email of 1 March (below) addressed to myself. As I manage the Team responsible for the conduct supervision of the Bank of Ireland.

We are sorry to learn of your concerns that in increasing its interest rate differential on a number of its base rate tracker mortgages, you and Mr Wilson are of the view that view the Bank of Ireland “clearly did not consider whether it was treating its customers fairly by doing so”.

We welcome information about the firms we regulate which might highlight wider concerns that could affect our regulatory activities. We were aware of the matter outlined in your email but unfortunately, due to the confidentiality restrictions placed on us by the Financial Service and Markets Act, we are not able to provide you with information regarding any actions that we may take.

If, as a result of this increase, you and Mr Wilson feel you have been treated unfairly, you should follow the Bank of Ireland’s complaints procedure in the first instance. If you are not satisfied by the firm’s response then you can refer your complaint to the independent Financial Ombudsman Service (‘the ombudsman service’) for a decision. This service is free of charge to consumers. The ombudsman service’s finding is binding on the firm, but not on the consumer, who has the option of rejecting the decision and pursuing the matter through the courts. The contact details for the ombudsman service are:

The Financial Ombudsman Service

South Quay Plaza

183 Marsh Wall

London

E14 9SR

I hope that this is helpful.

Yours sincerely

Hi all, don't know if this has been mentioned elsewhere on this topic but here is an excerpt from the Office of fair Trading Website

"The OFT cannot determine whether a term is or is not unfair or whether any individual consumer is entitled to compensation. It is our duty to consider any complaints about the unfairness of a contract term and if we believe that a term is unfair, we have powers to ask a court for an injunction to prevent it being used or recommended for use. However, only the courts can finally decide whether a term is or is not unfair".

So is it worth sending copies of letters to the OFT? Would be very nice if they brought an injunction against BOI but do not hold your breath.

And just started my "Don't buy BOI" Campaign with the Post Office. Letting them know what a bunch of scammers they are in bed with!!

ALL: Please do not wait for the final response from BOI. You can lodge the initial complaint with FOS.
If you wait 8 weeks, the lines might be too busy or blocked. The daily statistics should be provided by FOS now.
The FSA should be able to help us if a few thousand people has lodged a complaint with the FOS.
But the power of people is more powerful than we think.

I know that the FSA published the definitions for different types/styles of mortgage in their MCOB documents and here is the link for it.

I doubt the BOI could have achieved using the clauses once the FSA took control in October 2004.

http://www.fsa.gov.uk/pubs/hb-releases/rel49/rel49mcob.pdf

MCOB 9 : Lifetime mortgages: product Section 9.4 : Content of illustrations
disclosure

Tracker rate - must be described as a variable Amount based on Y%.
rate which is [X% above/X% below/the same
as] [insert interest rate tracked, currently Z%],
[where applicable insert the date at which the
interest rate ends or the period for which the
interest rate applies], to give a current rate
payable of Y%. Details should also be provided
of how soon after an interest rate change the
mortgage interest rate is adjusted.

GARY
Good idea to send letters to OFT.

@Tony - it is not uncommon for banks to do this on business overdraft or other commercial banking and financing agreements and there is no dispute about them having the rights to do this. However, buy to let and residential mortgage facilities are different. What type of facility was the HSBC facility? If it was a mortgage please email me a copy of their letter announcing the increase and also your mortgage offer letter and conditions of mortgage booklet to mark@property118.com and I will look into this for you.

Hi,

Was doing an internet search and came across this from BOI. It does say that the FSA aware.

http://www.bankofireland.com/btlirinfo/faqs/

There are a lot of different comments about this on this forum and moneyexpert. Am going to follow the process outlined earlier complaining directly to BOI and wait on outcome. I agree we need to agree a process between us all first.

I would say though the argument about not increasing for Irish Nationals is not a valid one. This condition was in UK B&W mortgages and not in B&W mortgages after 2004. This is all about a special condition in some UK only mortgages. I'm all for arguing against but let's facts right.

I don't think we will have any joy though, although will obviously try. In the meantime do I need to start looking at remortgage options now ? Has anyone else done this ? Are there any good BTL rates ? I currently have about 35% LTV i.e. property worth £250k and mortgage £70k. Or are people waiting to see the outcome ?? Don't want to be left paying a higher rate mortgage than I need to. Would really welcome comments.

I can ask this in a different forum if not the correct one.

Another piece of documentation I have looked at is previous notifications from BOI when BOE rate changed, (and when I made draw downs or payments it is a flex morgtage). They send out a template letter, and include a sheet called Account Details. This lists the sub accounts, Balance, maturity date and forth comming payment schedule with the Interest rate, which is described as "Interest rate (Current Rate: 5.6%)" or whatever rate related to the letter all fair enough. Below the interest rate is a single sentence repeated on each sub account which reads "From now until the end of the mortgage term, the interest rate we will charge will be 0.85% above the BOE Base Rate."
They are prepared to star the balance to inform me its not the redemption figure, but no such indication that the differential is not a fixed one.
The last correspondance of this type was Feb 2010 when we made a lump sum repayment, and I have similar such letters dateing back to the start of the loan.
Please note this is on a residential mortgage, I dont know if such documents apply to BTL. I appreciate this thread is for landlords so your terms may be different, but I am willing to add my information in here if it helps.
I phoned the FOS this morning and I can confirm they will register a complaint has been raised (and they are aware of this matter), although you need to wait for the BOI response to your complaint to take it any further.

I have just got off the phone from BofI - I decided it was ridiculous me being so scared of the postman.... the good news (for me) is that my 4 BofI accounts are not affected by the rate rise. I have never been so relieved in my life, I can tell you that!!
I asked what the reasoning was and she confirmed that it was a change in t&c's so was date related - my first account with them was 2004 so that would confirm the pre-2004 working theory.
The other thing she said was that all the letters were sent out last week, so everyone should have received the bad news by now if they were getting it.

I sincerely wish you all luck.