Bank of Ireland increase differential on tracker rates

I have just spoken to BOI and formally lodged my complaint. BOI confirmed that no mortgage after 2004 is affected as the "clause" has been removed . Also confirmed that not all mortgages prior to 2004 are affected as they don't all contain the relevant "clause".
BOI also told me that the clause for my particular mortgage couldn't be in the Residential Mortgage Conditions as my mortgage is a BTL. I had to explain to them that on point 10 b (i) and 10b(ii) the document refers to the conditions of 6m and 6l of the Residential Mortgage Conditions. The point being that even the bank didn't realise that the dreaded "clause" is not only deeply buried in the terms, but on another document which I haven't even been given.

"Mark - @Puzzler – I doubt that any action here will bring the collapse of BOI so no comparison to Equitable Life is realistic."

BOI have done this because they're already in trouble, and have been bailed out by th Irish government and now have to recoup their losses. So it is pretty much the same.

Interest rates will go up for all of us in the fullness of time; as landlords we're in business and if you can't afford this rise, then you will be in real difficulty later on. It is unfortunate but rate rises should be in a landlord's business plan. I know you will say "but it's in the terms & conditions". Surely the overdraft rate fiasco should have alerted everyone to the fact that banks can and do change them whenever they like. I had a great flexible loan from cahoot then part of Abbey National and bought by Santander. I paid some of it off thinking I could redraw on it later but they withdrew the facility as they were winding down the product.

I repeat that if people donate resources it would be put to better use in helping them remortgage, I know some people will not find it easy, that's why I suggest helping them. In the long term this is still a very low rate and if you are already struggling then you need an exit strategy asap.

INITIAL FINDINGS

I have now had the opportunity to review the following terms and conditions:

“Bristol & West PLC Residential Mortgage Conditions 2001” and “Bank of Ireland Mortgages – Mortgage Conditions 2002”.

If your mortgage is covered by either of those terms and conditions then your chances of a successful legal challenge against the Bank of Ireland based on the actual wording of the conditions will be limited.

The relevant clauses say something along the lines of:-

they can increase the differential (margin over base rate) because:-

“…we wish to increase the amount we receive from borrowers in order to maintain a prudent level of profitability or reserves..
..we wish to respond to the actions of our competitors..
..because it is costing us more to administer borrowers’ accounts..
..because we believe that general economic factors have increased the risk of shortfalls on borrowers’ accounts or on accounts of the same type as yours and we wish to increase the amount received to protect us against that risk.”

The bank will be able to defend its recent actions based on the fact that any one of those conditions are fulfilled.

There may be other terms and conditions which are different to the ones I have just mentioned and I would be happy to review those (on a no obligation basis) if you want to email them to me at info@lawdepartment.co.uk.

So what are the options for borrowers, who have received the letter from the Bank of Ireland?

There are basically two options:-

1 to launch an action based on the Unfair Terms in Consumer Contracts Regulations 1999 on the basis that whilst there may be explicit terms in the mortgage document allowing them to increase the margin, this clause is inherently unfair; or
2 bring a claim against your solicitor or broker for failing to highlight these terms at the time the mortgage was taken out.

We will obtain Counsel’s advice as to whether a claim can be brought under the Unfair Terms in Consumer Contracts Regulations 1999 and update you further.

To hell with the Law , City AM, reports BOI deeply in the red only yesterday.

This is a Bank forcing customers to pay for its mistakes, exactly what our Government prommises to protect us from.

Take it to the House of Lords shut them down, it's Theft, not good business practice.

I have no time for these type of bankers any more

Richard

RE "To hell with the Law , City AM, reports BOI deeply in the red only yesterday.

This is a Bank forcing customers to pay for its mistakes, exactly what our Government prommises to protect us from.

Take it to the House of Lords shut them down, it’s Theft, not good business practice."

Theft = Dishonestly appropriating property belonging to another.

Well it isn't dishonest as its in the terms and conditions you signed, so not theft. Anyway above you quote "to hell of the law" before you get the theft laws wrong.

I have 5 BoI mortgages but thankfully I am not effected (yet). They weren't B&W and I was never offered cash to redeem them.

Some people are talking about changing to standing orders and maintaining the contracted payment but some are worried about the effect on their credit rating.

I am not an expert but just wondering if you can invoke the direct debit guarantee after making your complaint to ensure correct amount is charged. Would this protect your credit record?

I am quite confident that we can win this case at the stage of FOS. Hopefully a few thousand people have already approach both BOI and FOS. I have tried to get the up to date stats but I have failed. If anybody is able to get information from BOI and FOS about numbers of complaints so far, let us know.
If BOI is in financial trouble, then it is charity they should be asking. If they are in the red, it does not give them the right to steal from the customers. I have not seen any clause which says, customers are responsible for BOI financial mistakes and we will increase the rates to stop the bank going bankrupt.

As mentioned I am a BoI customer not effected but very angry.

I think someone maybe ray boulger from Jon charcoal mentioned that skipton tried a similar trick and that they may have settled a number of cases out of court to avoid a legal precedent being set. I am sure confidentiality clauses were involved but is there anyway anyone can find out any more in case there is any useful info for our cause.? Just an idea.

BOI biggest mistake was to purchase Bristol & West mortgages. Customers are not responsible for their decisions. If BOI is in trouble, they will need to be bailed out by the taxpayer and not not by individual customers. The rate increase MUST BE REVERTED BACK TO 2.25 and compensation sent to all affected customers. The longer they leave it, the more expensive will be for BOI.

Bank Of Ireland published their Preliminary Statement on 4 Mar 13. It shows they made an operating profit, meet the capital requirements and they say they don't expect to need to raise further capital when the new stress tests are made later this year ( having raised new capital autumn 2012). Interest margins improved from 1.25% to 1.34% in last half of 2012. Fairly upbeat about future. In other words not consistent with the letter of 25 Feb and there does not seem to be much justification to invoke the alleged special condition. I intend to ask them to explain to what extent the bank ( and more specifically UK operation) is not viable without this action. At an average of £145 per month hike I calculate it would produce £20m to £25m pa profit. Put that in perspective - bail out was £85 billion, which of course took into account existing problems the bank had with loss making loans. Disprortionate hardship to customers, small beer to the bank. Unfair and unreasonable.