# My AGM speech



## Brendan Burgess

I have just delivered it by phone now. 

Thank you Chair

I have four questions for you

One - When will you be announcing the redress scheme for the 5,900 prevailing rate customers whose contracts you broke?

Two - Will you be applying the full Central Bank Redress Scheme to these customers and putting them on a tracker mortgage for the remainder of their mortgage term?

Three - How many customers have lodged High Court proceedings on the Prevailing Rate issue?

Four - Did  any of the non-executive directors of AIB challenge the group-think on the Prevailing Rate issue?

*By way of background *

These customers had a mortgage contract which stated that at the end of their fixed rate period, they could choose between a fixed rate, a standard variable rate and a tracker rate at the then prevailing rates.

When their fixed rates ended AIB did *not* offer these customers the prevailing rates as they were contractually obliged to do.

AIB’s steadfast refusal to honour the terms of their contract was based on the most *flawed* arguments. Here are just *some* of these *flawed* arguments.

The first argument - The contract said that the borrower would have a *choice* of a tracker mortgage. It didn’t say that AIB had to *offer* them a tracker mortgage.

The second argument - We no longer had a prevailing rate because we no longer offered tracker rates to new customers.  Even though the mortgage contract did not define prevailing rate at all, never mind defining it as the rate on offer to new customers, AIB claimed that this is what they had intended the contract to mean when they drafted it in 2006.

The third argument - This was not a breach of contract, this was a service failure. i.e. we did nothing much wrong. A service failure is where the bank makes a mistake and takes three months to resolve it.  The failure to offer a prevailing rate according to the contract was not just a “service failure.” It was, as the Ombudsman ruled,  a breach of the fundamental terms of the contract.

The fourth argument – This failure to offer the customers tracker mortgages did not cause the customer to lose anything because the prevailing tracker rate would have been up to 7% higher than the SVR or the fixed rates.    This was the most *flawed* of all.  Up until 2008, when AIB did offer tracker mortgages to customers rolling off fixed rates, they set the tracker rate at or below the SVR.   But 10 years later, AIB tried claiming that if they had offered a tracker rate, it would have been 7% higher.

It is extraordinary that the non-executive directors who are paid fees of between €100k a year and €365k a year, did not point out how flawed these arguments were. A mock board of transition year students would have seen the flaws in these arguments instantly.

When this problem was uncovered back in 2015, you should have admitted the mistake and redressed those customers.

Instead of doing the right thing, you fought it all the way.


You dismissed all complaints from customers on the issue
You dismissed me when I raised it at every AGM for the last four years
You dismissed the Central Bank when they tried to get you do the right thing
You dismissed the Oireachtas Finance Committee, making a show of yourselves arguing about the difference between a breach of contract and a service failure. It would have been funny if it was not so serious.
But you could not dismiss the Ombudsman. That is where you came a cropper. Last month, the Ombudsman told you that you had committed a breach of the fundamental terms of the contract and told you to write down the mortgages of these customers by 12%. 



If you had faced up to the problem in 2015, you would have reduced the cost to the AIB shareholders and you would have reduced the damage to AIB’s reputation.

Admitting a mistake early and fixing it costs a lot less. It is a sign of strength.

Being forced to do the right thing by the Ombudsman or by the High Court is a sign of weakness.  And it costs you a lot more in the long run.

But this is not just about AIB and its profits. It’s about its 5,900 customers and their families. Every month you delay fixing this problem, you pile on the misery which your high mortgage rates impose on the impacted families. How many of these borrowers have been pushed into arrears because of your failure to give them tracker mortgages? How many have lost their homes?  How much is it going to cost AIB to compensate these people for the damage done? This cost could have been greatly reduced had you acted responsibly and faced up to the problem earlier.

But even if you could not bring yourselves to do the right thing in 2015, when the problem was uncovered, why did you not do it in October 2017 when the Minister for Finance called in the Chief Executive of AIB and the other banks and told you and I quote

_“The legalistic approach taken by some banks to avoid doing the right thing is simply unacceptable. Ultimately such behaviour is not in the interests of customers or shareholders._



And the Minister went on to say:

_[The banks have committed] that All redress and compensation will be in line with the ‘Principles for Redress’ set by the Central Bank”_

I hope that the Minister’s actions today will match his stern words and that he  votes against the reappointment of the three directors who were on the board in 2017 and who are still on the board today. They are Brendan McDonagh, Carolann Lennon and Helen Normoyle.

It’s too late for AIB to undo the damage you have done so far to these families and to the finances and reputation of AIB.

But I would ask you now at this late stage to face up the problem. While the Ombudsman upheld our complaint and directed that you give these customers a 12% write down on their mortgage, he did not direct you to apply the full Central Bank Redress Scheme.

So I would ask you now as a small gesture of remorse and apology to apply the full Central Bank redress scheme to these customers.

One - Refund the interest overcharged since they came off their fixed rate  

Two -  Pay them 15% of the interest overcharged as compensation for your failure. 

And 3    Put them on a tracker rate of 1.5% for the remaining term of their mortgage.

Let me stress here that we are not being greedy. A mortgage rate of 1.5% is *not* a cheap tracker. It is still well above the average mortgage rate in the eurozone which is 1.35%. 

Your breach of contract and continuing mean-spiritedness has cost the AIB shareholders €300m so far and has damaged the reputation of the bank. Instead of putting the tracker scandal behind you as a legacy issue, you seem to be determined to keep the tracker scandal alive. You continue to waste management time on this issue when there are other existential issues for the bank to be dealing with.

But it makes financial sense to deal with this properly now. If you don’t, some of the very angry customers will take this to the High Court and if they win, it will double the cost to AIB from 300m to €600m.

As I say this over the phone I sense your arrogance and dismissiveness. It’s the same arrogance and dismissiveness I encountered when I raised the prevailing rate issue at the 2016 AGM, at the 2017 AGM, at the 2018 AGM and at last year’s AGM.  But instead of arrogance and dismissiveness, you should be showing humility and engagement.

Your arrogance and dismissiveness did not work with the Ombudsman and it won’t work with the High Court either.

To conclude, let me remind you of my four questions


When will you be announcing the redress scheme for   the 5,900 impacted families?
Will you be applying the full Central Bank Redress Scheme to these customers?
How many customers have lodged High Court proceedings?
Did  any of the non-executive directors of AIB challenge the group think on the Prevailing Rate issue?
Thank you


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## Brendan Burgess

They replied that they were applying the FSPO decision and no more.

12 people have initiated legal action on the Prevailing Rate issue 

The board has robust discussions on every issue, but he did not say that anyone dissented from the group think.

Brendan


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## bungaro

Fantastic work Brendan.





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						AUD-20200429-WA0004.m4a
					






					drive.google.com
				




Update: some people had problems with that link so I have attached it in three parts.


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## zxcvbnm

That’s great work a Brendan. Not unexpected that they will only apply the ombudsman decision and no more.


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## Brendan Burgess

The extraordinary thing is that they repeated the arguments. 

Colin Hunt said in his presentations "although these people did not lose out, we have decided to roll out the Ombudsman's decision to the other customers." 

The Secretary repeated it in an answer to a written question submitted by a Hugh McGuire 

They said that they had made great progress on their culture improvement journey. 
And they always wanted fair outcomes for customers.

Brendan


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## Brendan Burgess

bungaro said:


> Fantastic work Brendan.



Hi Bunagaro

That is great thanks.  I am embarrassed listening back to it.  But it's great to have the recording. 

Brendan


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## tnegun

Brendan Burgess said:


> They replied that they were applying the FSPO decision and no more.



Does this mean the 12% write down + interest or just the 12%?
edit. Just got to Mr Hunts piece and he indicated 12% + interest.



Brendan Burgess said:


> Hi Bunagaro
> 
> That is great thanks.  I am embarrassed listening back to it.  But it's great to have the recording.
> 
> Brendan



Don't be you were fantastic, I would be very proud of yourself for being the champion and voice of so many.


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## Sue Ellen

Brendan Burgess said:


> Hi Bunagaro
> 
> That is great thanks.  I am embarrassed listening back to it.  But it's great to have the recording.
> 
> Brendan



No need to feel embarrassed it was very well presented.

The arrogance can even be heard in their voices, shame on them for treating the people who pay their extremely high salaries in this manner.  I am a firm believer though in karma.


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## KurtKasino

Excellent speech Brendan, well done.  Their arrogance is breath taking but not surprising


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## Brendan Burgess

tnegun said:


> Does this mean the 12% write down + interest or just the 12%?




The 12% + interest. 

Brendan


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## Sarenco

Well done Brendan - great speech.

I wonder is the Irish Banking Culture Board taking note?


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## bungaro

It was brilliant to hear Brendan put our case and the issues across in such an eloquent manner while not letting them off the hook.
But the arrogance and hypocrisy to talk about the change of culture while dragging out this issue and the seeming lack of remorse when stating that the 5900 were not affected? I was annoyed when after Brendan they said there were no more questions. I had entered the code to put a question to them and would've loved to follow up on Brendan's points


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## Megafan

Absolutely fantastic Brendan, a credit to you. Concise and damning.

AIB to copy Shakespeare will hopefully now be hoist to their own petard. The below quote from AIB makes no sense really, you can't be half pregnant in this situation. They have explicitly/implicitly accepted they were wrong for 5,900 customers, you don't write off €300mn and take another massive hit to future interest revenues on a whim. It just doesn't make sense to say people didn't lose out, of course they did.  

"although these people did not lose out, we have decided to roll out the Ombudsman's decision to the other customers."

I think it is really interesting the thread Brendan has pinned in this forum, isolating the SVR versus the ECB. I dare anyone to just glance at that and wonder if they lost out or not. 

I know from a personal perspective, we are very fortunate to find ourselves in this cohort, we just are and that is the reality of it....but I don't think AIB are now in a locked down, that's that, job done, everyone's happy place. There still is a thread to pull at and people will pull at the thread to see anyway. 

So fair play Brendan.


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## Ceist Beag

Well done Brendan, very well spoken.
As others have said, the arrogance of them is palpable. 
Chairman - "I note you didn't introduce yourself Brendan but I recognise the voice" .... ehhh except Chairman Brendan did indeed introduce himself quite clearly at the start but you were obviously not paying the attention or are just a bit hard of hearing!


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## Brendan Burgess

Ceist Beag said:


> Chairman - "I note you didn't introduce yourself Brendan but I recognise the voice" .... ehhh except Chairman Brendan did indeed introduce himself quite clearly at the start but you were obviously not paying the attention or are just a bit hard of hearing!



Hi Ceist

Thanks for that. I was sure that I had introduced myself but there was some confusion as I was getting no feedback.

It was like when you are on a phone call and you have been telling some story and then you notice that the person to whom you are talking hasn't said anything for a while and you realise you had been cut off 5 minutes ago.

I just ploughed ahead anyway and didn't know that it had been heard until the Chairman said "Thank you." when I finished.

Brendan


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## tnegun

Ceist Beag said:


> Chairman - "I note you didn't introduce yourself Brendan but I recognise the voice" .... ehhh except Chairman Brendan did indeed introduce himself quite clearly at the start but you were obviously not paying the attention or are just a bit hard of hearing!


That annoyed me too, not sure what but trying to insinuate something from before he even addressed the questions.


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## Brendan Burgess

tnegun said:


> but trying to insinuate something from before he even addressed the questions.



No. He just didn't hear me saying it in the confusion. 

Brendan


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## kopkidda

Very well done Brendan, your some man. 

I can't open that audio file but that speech is brilliant, concise, to the point and scathing, just what they needed to here. 

Not surprised they aren't applying CB full redress program to those affected but I hope that someone with money takes them to the high Court and then the cleaners!


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## Up Rovers

Well done.

Listening to that would nearly make one embarrassed to admit to being an AIB customer for fear of being associated with their actions and arrogance.

Shame on them.  Their actions certainly don't have my approval and speaking as an AIB customer of 45 years.


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## Balfour

Well Done Brendan, very well said.


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## zxcvbnm

So do we find out today which way the minister votes re electing them to the board again ?


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## mathepac

Exceptional Brendan, a fine, well-worded and well delivered presentation, rich in fact and straight to points and behaviours at issue. Congratulations.


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## Brendan Burgess

zxcvbnm said:


> So do we find out today which way the minister votes re electing them to the board again ?



Yes. The votes were counted immediately after the meeting and the results would be known by now. 

They will probably do a press statement.

I am sure that Paschal Donohue voted for the directors or else we would have heard by now.

Brendan


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## Track2019

Hi Brendan, that was a fantastic speech. Thank you for everything you have done so far for so many people. While the bank states they will apply the FSPO decision only, do you think now that there is any chance the CBI will still insist they revert the accounts to a tracker rate?


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## blue_steel

Excellent summing up Brendan. The banks as usual will give nothing unless they are forced to. AIBs PR spin about putting the customer first shown up for the BS it is. I sincerely hope they end up paying out even more in a few years time.


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## Brendan Burgess

The Minister voted in favour of the appointment of all the directors. 






						Investegate |AIB Group PLC Announcements | AIB Group PLC: Results of Annual General Meeting 2020
					

Investegate announcements from  AIB Group PLC, Results of Annual General Meeting 2020



					www.investegate.co.uk


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## tnegun

Brendan Burgess said:


> Although it's very odd that the CB has not told them to make a public statement on the matter and to write to the impacted customers immediately.


Did this come out today or did we know it already?


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## bungaro

Brendan Burgess said:


> The Minister voted in favour of the appointment of all the directors.
> 
> 
> 
> 
> 
> 
> Investegate |AIB Group PLC Announcements | AIB Group PLC: Results of Annual General Meeting 2020
> 
> 
> Investegate announcements from  AIB Group PLC, Results of Annual General Meeting 2020
> 
> 
> 
> www.investegate.co.uk



Well in fairness, at least he's consistent. I've no political affiliation but no FG politician has helped us in any way in our issue to the best of my knowledge


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## RealDeal

Excellent points Brendan and well presented

Was there any idea given as to how many of the 5900 lost homes through Voluntary or Forced Sale?

Any idea as to what terms of redress those affected by loss of home might receive?


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## Megafan

There are still things you could possibly take to the Ombudsman as well possibly, minor things if AIB weren't forthcoming.

Not sure if this will hold water but does this judgement effectively timestamp the reduction from when you roll off your first fixed rate? So if you were someone who was close to your LTV 80% presently, then once this change is put across, then theoretically you would have hit your 80% a few years ago so you could raise a question (I may need to research this, it could be completely off the wall!!!) as to whether it would have been appropriate to retrospectively avail of LTV discounts. Maybe this would be like a nuisance case for the FSPO and something AIB might need to consider. It wouldn't be huge reward financially but maybe there is a point somewhere in the above.

Anyhow, this is all in a vacuum at the mo until we see the final redress and FSPO decision.


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## Neverever

Well done, as ever, Brendan


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## horizon2

Well done, Brendan.

Perhaps, in my opinion, it might be time for a series of protests outside the offices of this institution, the Central Bank and the office of the minister for finance (once this Covid lockdown ends)?

I am sick to the teeth of seeing their "Fair" adverts on TV, could their attitudes here also be a breach of the advertising standards?


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## mathepac

Good point. A complaint made to the ASAI could force them to change or withdraw their ads. See here https://www.asai.ie/


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## ClubMan

mathepac said:


> Good point. A complaint made to the ASAI could force them to change or withdraw their ads. See here https://www.asai.ie/


The ASAI are a total waste of time in my opinion and experience. Useless.


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## Daithib

AIB’s tracker woes continue to haunt
					

Bank’s refusal to put customers back on trackers keeps the scandal alive




					www.irishtimes.com
				




*Bank’s refusal to put customers back on trackers keeps the scandal alive*


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## AIBTracker6000

Any right minded person on the board must have been cringing listening to you Brendan. When spelled out in those no uncertain terms, its seems clear cut. Why do they continue to fight?  Baffling


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## LolaG19

Great work Brendan, we may not have heard the last of this yet. It’s so wrong that they won’t do the right thing by their customers or ‘those people’ as Mr Hunt refers to us as. Does anyone know that if a case is successful in the High Court the Bank has to apply the ruling for similar cases?


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## Olive7

U spoke so well and made things so clear and thanks for your continuous fight for everyone


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## lizz1979

Brendan well done. Thank you for standing up and fighting for us all. You spoke extremely well. Their arrogance really is shocking.


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## Brendan Burgess

This is the first time I made quote of the day in the Irish Times!


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## tnegun

Well done, just recognition. You should frame that and hang that on a wall you're earned it!!


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## ClubMan

Brendan Burgess said:


> This is the first time I made quote of the day in the Irish Times!
> 
> View attachment 4509


You might make it into the weekend supplement "what's hot" list yet (if the IT still does that - haven't bought a newspaper in about a decade now!)?


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## October2019

Well done Brandan again, I preferred the transition year mock up board quote myself , I could feel them cringing on the phone, as I was laughing!!


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## zxcvbnm

This could be a contender for a future episode of “reeling back the years”  

In all seriousness well done. Good it’s getting the media attention.


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## Brendan Burgess

zxcvbnm said:


> This could be a contender for a future episode of “reeling back the years”



It felt a bit more like Father Ted to be honest.

"We did nothing wrong, but the Ombudsman just doesn't understand it! is the equivalent of "The money was only resting in my account"

Brendan


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## 1 step forward

bungaro said:


> Fantastic work Brendan.
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> AUD-20200429-WA0004.m4a
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> drive.google.com
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> Update: some people had problems with that link so I have attached it in three parts.


Did he say at the start that you didn't introduce yourself but he recognises your voice anyway from the many radio interviews, when you quite clearly introduced yourself.? An attempt to undermine in my opinion and portray a minor irritant. Lets just move on and stop going on about it. Nothing to see here.


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