Change of fixed interest rates

S

Shanneah

Registered User
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Last January I was shopping around for mortgages and at the time AIB were the most competitive offering me a fixed rate of 2.94% on my mortgage for the first year. I told the bank that I wouldn't be drawing down the mortgage until June but they assured me that I wouldn't get a better rate. I accepted and signed the offer in January and drew down the mortgage at the beginning of June. I then received a letter from the bank alerting me to my new fixed interest rate of 3.95%. I complained to my bank about this and the financial advisor at the branch assured me it was a mistake and she would sort it out. However, she then found out that there was a clause on the orginal offer (in the small print) stating that unless I drew down the mortgage within 45 days of the offer I would loose the interest rate quoted. She was unaware of this clause and thus did not advise me of it. I feel really duped by AIB. Obviously I didn't read the small print of the offer but their financial advisor didn't even know about it and thus didn't advise me about it. She sold me a product she could never have delivered on as she was aware I wouldn't be drawing down till June. Is there anything I can do?
 
I think if you talk to a manager I believe you have a case and he might be able to help you, I am with AIB and a few yrs back I changed a dollar check to punts for a considerable amount of money,I got the rate of the day thinking nothing of it, until someone at work informed me they got a special rate because of the amount involved. I got back on to the the bank and got the special rate, It meant over 1500 Punts extra to me at the time.
 
Missold product (you were sold the wrong product).

Go to www.ifsra.ie if you can prove it and have paperwork mentioning June that you would have brought to AIB to get the mortgage.
 
Thanks for that. I will check out ifsra.com. I have nothing on paper however to prove that the bank knew I was drawing down in June. I have spoken to the manager of the bank. He says he will try his best but is not hopeful. Apparently they say mortgages is one area they have very little control over. I'm sure that's another line they are spinning me.
 
I have been told that IFSRA now insist that the deal you get depends on the day you draw down so as to be fair to all borrowers.
 
But how can that be just. If I employed someone, and sold them the job based on a great salary, but enclosed in their 10 page contract that this salary would only last for 10 days and then it would be halved, is that still legal. Can you sell a product that you know will never be delivered and not alert the customer to the small print.
 
There is reading the small print and then there is being advised twice in person by an authorised officer or the bank that the offer would be available. Personally I am surprised that the bank don't just accept the cock up for the sake of public relations. Keep pressuring them.
Unfortuantly as mentioned above, reading the small print is your repsonsibility so I wouldn't even bother going to to IFSRA. Legally, they have done nothing wrong. Maybe contact one of those papers that do financial Q&A or something with your story. They can be quiet handy when it comes to getting big companies to change their attitude!!
 
You signed a leagelly binding contract therefore there is no get out - It was as much your solicitors responsibility to point out the conditions of the Loan Offer as it was the advisors!
 
Shanneah said:
but they assured me that I wouldn't get a better rate.
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But this is not the same as telling you that the rate they were originally offering was not going to change.

Did you check to see if there were any other lenders offering more competitive rates at that time, or did you go purely on what the AIB advisor said?

2Pack said:
Missold product (you were sold the wrong product).
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I disagree. Misselling implies that you have been sold a product that is not suitable for your needs (IMHO)-unless it is deemed that a fixed rate mortgage was unsuitable for the OP, then I don't believe there has been misselling. Misinformed, yes. Missold, no.

WizardDr said:
I have been told that IFSRA now insist that the deal you get depends on the day you draw down so as to be fair to all borrowers.
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This was always my understanding of how the relevant mortgage rates were determined.

Going back to the reading of small print-a mortgage agreement is most likely one of the most significant documents that we are likely to sign, and I would advise anyone to read all of the contract (including the small print-what else is it there for?) carefully before signing-don't rely on someone selling you the product to highlight important issues that may influnence your decision.
 
I admit I am somewhat to blame for not reading the small print. I placed too much trust in the advisor and that is my own ignorance. I just feel a little more than put out that their financial advisor did not know about the small print. When I told her, she was sure a mistake had been made until her advisor's in Dublin told her about the 45 day clause. I just feel that their financial advisors should be aware of every part of the contract and should be able to "advise" you. I suppose however I am at the bank's mercy now. I definitely have learned my lesson about reading small print in the future.

Thanks for all your help.
 
Shanneah said:
But how can that be just. If I employed someone, and sold them the job based on a great salary, but enclosed in their 10 page contract that this salary would only last for 10 days and then it would be halved, is that still legal. Can you sell a product that you know will never be delivered and not alert the customer to the small print.
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I don't think the adviser sold the product knowing that it could never be delivered. There has been talk of interest rates rising for the last couple of years and it is only in recent months that it has started to happen. When you meet with a mortgage adviser they can only quote you the rates that they have to hand ie. current interest rates. Sure they can tell you how much extra you would be paying if rates were to rise by x% but they can't predict whether or not interest rates will actually rise, and if so by how much. Therefore, I think it is unreasonable to expect the adviser to tell you haow much you will be repaying on your mortgage.

I would, however, query the adviser's claim that you would not find a better rate. Maybe if you found a lender with a lower 1 year fixed rate you could ask the bank to match this, reminding them that they told you they would give you the best rate.
 
Shanneah said:
I admit I am somewhat to blame for not reading the small print. I placed too much trust in the advisor and that is my own ignorance. I just feel a little more than put out that their financial advisor did not know about the small print. When I told her, she was sure a mistake had been made until her advisor's in Dublin told her about the 45 day clause. I just feel that their financial advisors should be aware of every part of the contract and should be able to "advise" you. I suppose however I am at the bank's mercy now. I definitely have learned my lesson about reading small print in the future.

Thanks for all your help.
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I guess it is an expensive but worthwhile lesson learned. I do agree that someone who is 'advising' you should be able to help rather than hinder you, but that is a much wider issue that is unlikely to change.

By all means make AIB aware of their advisor's mistake in this matter and that you will not hesitate to switch your mortgage at the soonest possible opportunity (if that is feasible, and after you have drawn down the mortgage of course).

Best of luck.
 
I think it is defo a case of misselling. You bought a mortgage product which was X% interest rate. You were given a product that was Y%. Different product. Yes the small print should have been checked but it was bought in good faith. I think the AIB should be mighty ashamed.
 
No-the OP was sold a fixed rate mortgage, and this is what they got. The rate was set out as X%, subject to certain conditions, outlined in the agreement (regardless of what the 'advisor' said). When the conditions were not met (i.e. drawdown within 45 days), the rate x% quoted was no longer valid.

shabba said:
Yes the small print should have been checked but it was bought in good faith.
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How can you buy something in 'good faith' without reading all the relevant documentation?
 
When interest rates dropped and borrowers ended up with lower rates on drawdown than they had been quoted, I don't remember hearing anyone complain about misselling...
 
It is not mis-selling in any shape or form. So lets put that argument to bed once and for all.

I think the only disturbing thing in this episode (apart from the increased rate to the OP which has being pointed out is not the banks fault) is the fact that the AIB advisor didn't fully know the product that she was selling and was apparently making promises that "you won't find a better rate" at the same time. I know we all take these statements with a pinch of salt but at the same time, I would expect more from a leading financial institution.
 
Hel_n said:
When interest rates dropped and borrowers ended up with lower rates on drawdown than they had been quoted, I don't remember hearing anyone complain about misselling...
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This is a FIXED product she was offered in Feb 2006 and not a variable. Had she been sold a variable in Feb it could have gone up or down, I know bloody it could, but she was MIS SOLD a FIX like I said. By the time she drew it down it was an extortionate rate compared to what she had negotiated. When has anyone ever heard of a 4 MONTH FIX before ????? . Normally you get 6 Months in an offer too.

Off to IFSRA with you I say again. Everybody else STAY WELL AWAY from AIB and these so called "advisers" until she gets the result she deserves and compo and an apology . Most fixes for FTBs last at least 1 YEAR , not 1 MONTH :(

This is sharp unethical behaviour of the highest order by AIB
 
But if fixed rates were cheaper when she came to drawdown would be entitled to the cheaper rate if she had already agreed to the higher rate??? The answer is yes in reality but no if we follow your argument! It works both ways.
 
2Pack said:
This is a FIXED product she was offered in Feb 2006 and not a variable. Had she been sold a variable in Feb it could have gone up or down, I know bloody it could, but she was MIS SOLD a FIX like I said. By the time she drew it down it was an extortionate rate compared to what she had negotiated. When has anyone ever heard of a 4 MONTH FIX before ????? . Normally you get 6 Months in an offer too.

Off to IFSRA with you I say again. Everybody else STAY WELL AWAY from AIB and these so called "advisers" until she gets the result she deserves and compo and an apology . Most fixes for FTBs last at least 1 YEAR , not 1 MONTH :(

This is sharp unethical behaviour of the highest order by AIB
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Shanneah said:
there was a clause on the orginal offer (in the small print) stating that unless I drew down the mortgage within 45 days of the offer I would loose the interest rate quoted.
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The OP was MISINFORMED as to the rate, not MISSOLD a product.
 
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