First Active moving the goalposts on CAM - not fair?

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Betsy Og

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Got a letter yesterday to tell me that the "net" repayment option (which I think they call "standard") was no longer available - this is where you make repayments based on your net mortgage, netting off mortgage account and current account.

So now theres no choice you have to make repayments as if you are paying off the gross mortgage sum (think they call this "planned repayment").

Since the interest cost is the same in both cases the Planned Repayment means you pay off your mortgage quicker as greater capital being allocated over from your current account to offset against loan account.

It had been suiting me to build up a "rainy day" fund in the current account and I was hoping to effectively repay my mortgage early by the funds in current account going up and meeting the loan account coming down somewhere in the middle. With the increased repayments its going to be hard for me to build up the "rainy day" fund much more.

On the point of principle, we signed up to a 20 deal and now a few years in they are changing the goalposts. I'm going to read the fineprint of the original deal when I get a chance but, regardless of it theres an "out" there, I think its most unprofessional to arbitrarily make changes to an agreement mid-race. I've a good mind to get irate and tell they where they can go & discuss it with the Financial Regulator/Financial Ombudsman if they want & remind them they are not the only "offset" mortgage providers.

Am I being unreasonable?? Are they trying it on??
 
I totally agree with you! I just received my letter today! This is a disgrace, I wonder where we stand legally? I mean they have sent out a consent form - why do they need us to sign it unless they are on shaky ground?

I signed up to their mortgage specifically for the benefits of the standard repayment and so have a number of my friends and I can tell you that they are extremely irate too!
 
I think what we need is one of the journalists who apparently scan this site looking for stories to take this us,

or Brendan, where art thou?? Could you give this an air on the Last Word??

When I get a chance I'll do my own checking of the fine print and see what the position is. Herself read the letter of offer and could see nothing to allow them, she also rang the Financial Regulator who didnt say much but asked if they were offering anything in return/in consideration for this change (which they are not).

Whats First Actives motivation??, is it that they are worried that they cant predict how cash in the current account will behave and therefore whether they can safely lend it on or not??
 
This does seem outrageous. I have been invited in to a meeting to discuss "changes we are making in the current account morgage" on Thursday. I have 2 morgages with them and so far they have said our system in future will only support 1 current account morgage and I have to change the other to another product type. Can they do that?
 
Hi folks,
Sorry to come across dumb, can someone please explain this to me, I also have a current account mortgage but have not received any letters, does this also affect me, please explain to the dizzy one in the corner
 
Legal Term allowing them to make changes

Inevitably there is a provision for them to change the product.

Condition 44 in the terms and conditions booklet say they can change and will inform customer.

This condition is unsurprising but may not be effective, I'm sure the same type of provisions are included in insurance contracts but they cant exactly say they are changing the conditions so that they wont pay out. i.e. I dont think something fundamental to the product can/should be varied by the provider, it would mean that the consumer has been sold something which then becomes unavailable to them.

There is a whole plethora of regulatory acts, codes of conduct, ethical codes etc which, I believe, this amendment goes against. e.g. bankers code of conduct that should have "integrity" & "loyalty" - basically that you should do as you said you were going to do.

As it happens I had written to them asking, amongst other things, for confirmation that the borrower could switch between planned and standard repayment as required by the borrower. The response I got was that this switching could take place as long as appropriate life assurance (level term) was in place.

Its amazing that with all the 'ass covering' provisions they wrote it that they didnt take the time or effort to spell out fairly fundamental points like the one I asked. & worse I got a fairly condescending "do you understand the product" message back via the broker from them.

One would think that if an institution is happy to blather on about the benefits of their product in promotional literature that they would take the trouble to spell out the conditions for the few souls willing to wade through them.

p.s. did you know that its a condition that you inform the bank within 2 months of getting married, someone tell the wedding magazines to put it on their checklists !!
 
Re: Legal Term allowing them to make changes

Betsy Og said:
Condition 44 in the terms and conditions booklet say they can change and will inform customer.
Click to expand...
Thanks Betsy Og - some hard facts at last!
There is a whole plethora of regulatory acts, codes of conduct, ethical codes etc which, I believe, this amendment goes against. e.g. bankers code of conduct that should have "integrity" & "loyalty" - basically that you should do as you said you were going to do.
Click to expand...
Perhaps one or more FA customers affected by these changes could make a complaint (based on the facts of the case) in the first instance to FA and, if necessary, to IFSRA?
p.s. did you know that its a condition that you inform the bank within 2 months of getting married, someone tell the wedding magazines to put it on their checklists !!
Click to expand...
You mean that this is a stipulation in most or all owner occupier mortgage loan agreements?
 
Re: Legal Term allowing them to make changes

once you marry its a family home under the Family Home Protection Act 1976 and you cannot simply sell it out from under t'other ......even if you bought it. Arguably it makes it a far dodgier proposition and risk for a bank or lender and that would be a material change in circumstances.

a short act, so read!

[broken link removed]
 
Re: Legal Term allowing them to make changes

ClubMan said:
You mean that this is a stipulation in most or all owner occupier mortgage loan agreements?
Click to expand...

Well I cant say that, I'm not in that line of work so I only know my own mortgage agreement but its in there as a condition for First Active. I'm not too bothered re that, its just a weird one that wouldnt occur to punters. If say, you got divorced, then I suppose the bank would arguably be entitled to know since it might affect the level of risk you pose - but on the other hand if the payments keep coming in then what matter it to them - I'm sure civil libertarians would have a crack at this one.

Re complaining, I certainly do intend to have my say on this one - nothing to lose and genuinely think they are renaging on a material feature of the product they sold. Sloppyness in the original documentation (see below) I can get over but just rewriting the product is, I think, a step too far.
 
Thanks 2Pack and Betsy Og for the additional info. I no longer have a mortgage but think I have my EBS loan agreement somewhere and must check it out of curiosity.
 
The FHPA 1976 is hardly on Bridezillas radar as she colour co-ordinates her prize labrador for its photos outside the church or the 'big day' :D
 
All
Thought I'd add what I've heard. I received a call from my branch manager to discuss the letter sent out and looking for my feedback. Apparently the standard repayment option is less frequently used than the planned one. Nothing is to happen immediately and I got the impression that they are unsure as to the response likely. They were looking for people's opinions to escalate general feeling so I would suggest contacting your branch manager to express and escalate your annoyance.
The argument being used is that RBS are moving FA onto their platforms and the RBS systems cannot handle this type of product. Apparently, although there are CA mortgages available in many other countries, they do not offer the kind of standard repayment option that FA do.(I'm sceptical to say the least but that's what I've been told).
S.
 
Tell them to buy a calculator and do the calculations manually.

What does the IFSRA have to say about FA abolishing a product where the punters are contracted in for 20 years ??

I reckon that FA will be told to do it manually if you complain or maybe manually in a spreadsheet ..........or else maybe pay you to move to NIB who still seem to do a CA mortgage like FA used to....as well as pick up compo for the hassle and a few squids from NIB towards the mortgage .
 
Well if they are looking for an opinion they are going to get it from me!

EUROPEAN COMMUNITIES (UNFAIR TERMS IN CONSUMER CONTRACTS) REGULATIONS, 1995

REGULATION 3

Subsection (2) For the purpose of these Regulations a contractual term shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer, taking into account the nature of the goods or services for which the contract was concluded and all circumstances attending the conclusion of the contract and all other terms of the contract or of another contract on which it is dependent.

SCHEDULE 3
Subsection ( k ) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;

Subsection ( m ) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;
 
It looks like the standard and planned repayment options have been removed from their web site as well.Well it might be time to move elswhere as I can get a lower interest rate elsewhere,and was only with FA because of this particular product.
 
As a minumum I think everyone here should print out this thread and post it to:

The Complaints Officer
First Active Plc
Broker Services Centre
First Active House
Leopardstown
Dublin 18.

I've done so with a Post-it attached to let them know I'm an unimpressed customer.

Plenty of time yet before need to throw off veil of anonymity and formally write to them. One hopes they will see sense and not make every one of us have to get into a legal wrangle with them. - Is there a precedent for a class action against a bank??

If they want a view as to the feeling on the issue then I think this is a genuine thing to do and not as "gimmicky" as sending a nappy to Micheal Martin. (and I know Sarah W has already emailed FA to alert them to this thread).
 
I have mentioned this thread to one journalist who might be interested in taking up the story.
 
I think it is disgraceful!! The only reason I got the product was to keep the payments down and they are turning around now and screwing me with this.

The sales man repeated to me yes this is great because you can keep the payments down. I asked in several branches to cross check to make sure I had a proper grasp of the product.

Reducing the term is not as valuable as in the future the amount owned will not seem like that much because of inflation.

How could you ever buy something from these guys again? They say one thing when they sell it to you and turn around then and change the whole agreement. There is a word for this dishonest!!

I am sure it is covered in a book of small print but changing something as big as this is just a cheap card trick pulled on hard working mortgage payers by a gang of suits in First Active.

I am going to switch the first chance I get if they try and push this through.
 
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