Bank of Ireland increase differential on tracker rates

Reply to the comment left by "ian " at "20/09/2013 - 17:30":

Joe Pearce's calculation of £150 is correct given that most of us in the real world work to the nearest £1/ £10 / £100.

Reply to the comment left by "Mark Alexander" at "20/09/2013 - 17:33":

I missed the zero of the 150, better recheck my tax return LOL.

Just a thought , as I would be up for this scenario. If anyone wishing to fund a big pot submitted funds equally say £ 1000 or similar and enough was raised to total the £100,000 mooted - then go for it. But if insufficient funds were raised then the original £ 1000 is returned to anyone who sent it in. That way either the case goes ahead to court or no one suffers a loss without at least a court case. It is extremely unlikely but not for certain that , in the event of a BOI victory , costs would be awarded against us. As it appears that from Counsel's advice the case could go either way and in those cases judges often do not award costs in favor of the victors. Just my thoughts thats all.

Sorry I'm late to the party here, but it's been suggested I look at this thread because of my background in corporate finance. If you are looking to raise a "fighting fund" and want to widen your 'audience' further, you may want to look at crowdfunding.

This is what you are effectively doing by raising a little of money from lots of individuals - and it just so happens that this is the fastest growing area of finance around at the moment, so there are lots of sites around that can help you manage this process effectively & give you a marketing tool to spread your message.

Because of what your purpose is, I'd suggest the most appropriate site is http://www.indiegogo.com because they fund campaigns as well as business ideas. I'll check if there are any more crowdfunders who accept non-business purposes and I'll post more when I've had a look.

For the benefit of all those following this thread I am the person who invited Kirsty to take a look and to bring her crowd funding expertise to the party. Take a look at Kirsty's member profile and then click through to her LinkedIn profile to check her out. I first met Kirsty a few weeks ago whilst she was in Norwich mentoring a specialist mergers and acquisitions accountancy firm which is a member of her network of 20 similar regional practices. Kirsty is the real deal and we are privileged to have her supporting this fight with her knowledge and advice.

Thank you Kirsty 🙂

Reply to the comment left by "Mark Alexander" at "21/09/2013 - 00:05":

wow, thanks Mark! A glowing reference 🙂

Well happy to help if I can. I can put together the "pitch" (as it's called when you launch a bid on crowdfunding site) for you (on indiegogo.com) and I can probably help you then get a wider audience by seeing if I can get it some attention as well in the finance pages of the national press (has your campaign hit the press yet? Sorry, I haven't read all 81 pages of comments yet!) - that would widen your potential 'audience' who may also be interested in investing.

You will of course have to pay a commission to indiegogo for helping you raise the funds (for them it's 9% when you start, but it drops to 4% if you raise your full amount), but you need to bear in mind, that using such a crowdfunder will give you more PR than just trying to raise the funds personally yourself. I'm not sure indiegogo is the right site yet anyway, as they are US based & I think it makes more sense to find a relevant UK one. Leave it with me, I'll probably need to speak to a few of them on Monday morning to check if they'd accept this, because it's not a purpose-type that's featured on a typical site's list!

Couple of questions to catch me up:

- who is the this action being taken by? (is it just a group of individuals at the moment? ie who will the legal team be billing? Do you have a not-for-profit company which you are using for the purpose? If not, I think you probably need something. Because 'investors' need something to invest in.

- what is the likely direct outcome from the case? Is it just a decision that they are acting unlawfully? If so, we can't return any £s directly to the participants after it's over (as we could if the judge awarded compensation), but they will of course benefit from the bank unravelling its decision to increase rates on their own mortgages/loans. Slightly less of a compelling reason for someone to invest in our pitch for funds - most will probably applaud what's going on and just sit back and wait. But by using a crowdfunder site, I think we can probably get more attention from the press, and you never know, some more people may feel moved enough to act to help.

I'm actually thinking http://www.crowdfunder.co.uk/about/team/ may be the more appropriate one. They do fund 'campaigns' (not in the legal campaign sense) but I think it would fit on there. And they are now owned by my friends at Crowdcube who are real innovators in this industry. My concern is that £100k, or whatever the target is, is an awful lot higher than the typical £2k that's raised on this particular site.
I'll give Darren a call on Monday and see what he thinks (assuming people think crowdfunding for a 'fighting fund' is the right way to go?)

Reply to the comment left by "Kirsty McGregor" at "21/09/2013 - 08:44":

Kirsty

Thanks for your posts - very interesting. Perhaps we could have a chat offline - I am the lawyer trying to bring the class action. We are currently awaiting a response from our barrister in relation to the latest communication to us from the Financial Conduct Authority. My email address is justin@lawdepartment.co.uk

Reply to the comment left by "Kirsty McGregor" at "21/09/2013 - 08:44":

Hi Kirsty

A bit of background for you.

So far, a Solicitor called Justin Selig has collected all money and held this in his client account. Around £100 people have each chipped in £100 out of 300 people who have registered an interest. Therefore, around £10,000 has been raised to date.

Significant legal work has occurred and Justin and the barrister acting against Bank of Ireland have billed fees for this work to Justin's client account.

We have had a minor success with the Bank having overturned its decision on around 10% of the increases imposed. However, the pot has run dry, the FCA have decided not to fund our case and we need to run a test case to prove the remaining BoI tracker rate increases increases are not legal.

We need to throw everything at the test case and that's what BoI will do as losing that case will open the flood gates for claims against them. The test case could cost as much as £100,000 to fight, especially if we lose and have to pay a significant proportion of the costs of the other side. If the test case is won, this opens a door for all future cases to be fought on a no win no fee basis.

I'm not aware whether crowdfunding has ever been used to fund a legal case. In this instance, around 13,000 residential and BTL mortgages borrowers remain affected by the BoI's decision to change the margin on their tracker rate products. You would think more that 100 of these people would be sufficiently aggrieved that their mortgage payments have doubled that a lot more would have chipped in their £100 wouldn't you? If only 10% of them did the £100,000 would have been collected, we can't work out why it hasn't happened.

All of the National-Media have carried the story and some of them have mentioned the Class Action. However, none of them has referred to our need to raise £100,000 or indeed that registration of interest is via Property118. Therefore, we have had to rely on people searching on Google and that's how most people have found us. Perhaps what's happened is that people have read or watched the news and thought to themselves, oh good, somebody else is fighting this, and then left it at that. It's generally only the most incensed who've made their way here.

So far as the case and out it could affect other goes, the crux of it is that BoI have only made the changes to contracts which pre-dated mortgage regulation!

Many have expressed concern that if one lender is allowed to do this and get away with it, other lenders will follow suit, hence everybody currently benefiting from a low rate tracker mortgage arranged before Oct 2004 is potentially affected. BoI are the forerunners because they think their T&C's allow them to do this but the affected borrowers and their professional advisers think otherwise. It's a David and Goliath battle but if this case never gets to Court it will send out a signal to lenders that they can take borderline decisions affecting thousands of borrowers because nobody will stand up to their bully tactics.

As you know, I too come from a corporate background, however, my knowledge of crowd funding is zero so I wouldn't know where to start. Maybe an introduction to the acting solicitor (Justin Selig) would be a good start?

Yes please - can you send me his details? He must have done some AML checks on 'you' as his client already, so I need to know firstly the entity we are starting with. We may have to form something - I'm thinking a not-for-profit/company limited by guarantee?

Crowdfunding is a very new concept in the UK, perhaps the last 2 years or so? It started for creative industries in the US, then the UK took a big interest when it could see the possibilities for funding small companies - the biggest in the property finance/development world is probably Thin Cats.

I've just launched a crowdfunding app (free on appstore if relevant to anyone) to identify the most suitable crowdfunder for a business, because there are so many out there that have slightly different goals and requirements. But as you say, I'm not aware of any legal campaigns being funded like this yet - but it's an innovative and marketing-savvy industry, so I'm sure we can find someone that would take it on.

I'll start with Justin...