# Central Bank Tracker Review



## Onceagain (8 Jun 2016)

Just read the following on the central bank website with reference to the tracker review.

"Lenders have appointed *external independent third party* assurers to oversee this work and to ensure that the review is being carried out in line with the Central Bank’s requirements".

It is my understanding that Bank of  Ireland are using staff to carry out this review, or would anyone else have more information?


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## rodger (8 Jun 2016)

Good question

About 6 months ago the head of Aib was interviewed in the Sunday times and he said Aib were employing 300 people to do the review.


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## rodger (8 Jun 2016)

This article indicates it's employees

[broken link removed]


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## corktim (8 Jun 2016)

Bank employees will do the main case work with a third party reviewing thier findings / decisions as far as I know.


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## peemac (9 Jun 2016)

Onceagain said:


> Just read the following on the central bank website with reference to the tracker review.
> 
> "Lenders have appointed external independent third party assurers to *oversee* this work and to ensure that the review is being carried out in line with the Central Bank’s requirements".
> 
> It is my understanding that Bank of  Ireland are using staff to carry out this review, or would anyone else have more information?


Important word is "Oversee" - basically a third party is checking hat the bank is doing it as per the CB instructions, so they just review the work rather than do the work.


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## rodger (10 Jun 2016)

I was thinking about the cost to Aib to employee 300 employees
And Bernard Sheridan thinks it will take 5 years

If the salary costs say 50,000 and overheads desk, manager, lights, hr etc adds another 50,000

Then 300 times 100,000 is 30 million per year

Over 5 years that's €150 million


How can aib justify spending that?

And that's tax payers money

Just doesn't make sense

Just give everyone a tracker

At least the money goes to people who deserve it


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## PJDCol (10 Jun 2016)

Did he actually say 5 years?


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## rodger (10 Jun 2016)

Paragraph 4


[broken link removed]


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## peemac (11 Jun 2016)

I always doubt hysterical headlines in newspapers backed up by zero facts.

1. I doubt if all tracker mortgages need checking - just the ones that moved to fixed and didn't move back. 

2. Even if 300 were working on it, they'd still be doing other work and this would just be another project. 

3. 5 years?  Again a hysterical based on nothing statement by a journalist looking to puff out a non story. 

The standard of journalism these days is quite poor - only the other day the indo had a headline saying aib were reducing svr to 3% - the real story was that Davys ESTIMATED that at some stage aib would reduce to 3% - Basically a total non story.


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## Sarenco (11 Jun 2016)

Bernard Sheridan is quoted as saying that it could take 5 years to fully sort out conduct issues - he certainly didn't say it would take 5 years to conclude the current tracker review process.

I've no idea where the 300 employees figure comes from - it doesn't sound even remotely realistic.


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## rodger (11 Jun 2016)

300 figure comes from the first paragraph

[broken link removed]

This was an article agreed with the chief executive

They weren't going to lie.
Particularly in the first paragraph.

Did you even read the link


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## Sarenco (11 Jun 2016)

rodger said:


> 300 figure comes from the first paragraph



I appreciate that Rodger but where does the 300 figure come from - did AIB say that 300 employees have been dedicated to the review process or did the journalist just make up this number?

Padraig Kissane estimated that AIB has around 3,000 mortgages in scope - would it really take an employee 5 years to review 10 individual cases?  Does that sound even remotely plausible?



rodger said:


> This was an article agreed with the chief executive



What gives you that idea?  Journalists in this country (thankfully) don't have to clear their copy with the subject of their reports in advance of publication.



rodger said:


> Did you even read the link



Yes Rodger, I read the article - I found it wholly unconvincing.  Do you take everything you read in the papers at face value?


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## rodger (11 Jun 2016)

I totally don't believe everything in the papers
It was an in depth interview with the chief executive
I read the full article.
It was planned publicity on the part of Aib.
They were laying out there stall.

The journalist didn't print anything they didn't want printed on this occasion.

Thanks for all your feedback

I agree with your opinions

I'm just connecting on what aib have made public

Effectively planning to spend 150 million on tracker issues

By the way there might be 3000 entitled in aib but they would have to review maybe 10,000


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## Sarenco (11 Jun 2016)

rodger said:


> The journalist didn't print anything they didn't want printed on this occasion.



How could you possibly know that?



rodger said:


> Effectively planning to spend 150 million on tracker issues



Not quite.  AIB has set aside €102m as a contingency to meet any redress payments that might arise following this review exercise.



rodger said:


> By the way there might be 3000 entitled in aib but they would have to review maybe 10,000



Is there any basis or rationale for that estimate?


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## rodger (11 Jun 2016)

Maybe they will review every single mortgage issued since say 2003.


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## Sarenco (11 Jun 2016)

rodger said:


> Maybe they will review every single mortgage issued since say 2003.



Why would they do that? 

In any event, AIB has written a lot more than 10,000 mortgages since 2003 - AIB currently has over 250,000 mortgage accounts on its books.


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## Onceagain (11 Jun 2016)

Bank of Ireland are looking for a further 150 staff to work on the tracker review, with 50 already working on it.


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## Sarenco (11 Jun 2016)

Onceagain said:


> Bank of Ireland are looking for a further 150 staff to work on the tracker review, with 50 already working on it.



Could you point us to a link for that? Thanks.


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## Onceagain (11 Jun 2016)

Staff memo, no link.


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## Sarenco (11 Jun 2016)

Onceagain said:


> Staff memo, no link.



Fair enough, thanks.  Are they contract positions?


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## Onceagain (11 Jun 2016)

Secondment positions, not sure how long for.Might know more next week.


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## MorgVar (11 Jun 2016)

Im getting more and more and confused and frustrated  by the whole process and lack of transparency and information  around the CB review. When announced last year there was no clarity on process released by CB and since the whole process lacks transparency. The review began without any process being published.They appear to have consulted in secret with select people and no public consutation process or invitation for public submissions which would appear proper for a public body. Numbers affected in commentry could be 10,000? customers, and last opportunity for custmers who lost trackers.

Im also confused on relationship and role if any, of the FSO in this process. In October last year the FSO announced a review of their previous decision on trackers since 2009- anybody know outcome of this or relationship with CB review.

Banks have also not given affected customers  any clear  info of process, appeal mechanisms if any and details of Independent Third parties which each Bank is to have appointed. Each Bank appears to make up their own rules on process. Customers should have opprtunity for direct engagement with these third parties appointed by each Bank??

Perhaps Padraic Kissane or Brendan may be able to update on above aspects?


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## rodger (12 Jun 2016)

Right so 300 for Aib not so hysterical after all?

Boi will have 200 employees 

At a cost of 100,000 each that's 20m per year

And over 5 years that's €100 million

Just for the investigation before anyone gets a cent


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## Sarenco (12 Jun 2016)

Rodger

I don't think anybody accused anybody else of being hysterical.  I certainly didn't - I simply queried where the figures were coming from.

I have no idea how many employees BOI will ultimately dedicate full time to the tracker review exercise.  Neither do you.

No idea where you are getting your cost figure of €100k per employee but I suspect that's just a wild guess.  Onceagain suggested that these are secondment positions so presumably the staff members are already on BOI's payroll.

Again, where are you getting five years from?  Even if BOI did dedicate 200 staff to reviewing, say, 10,000 files (per your estimate), that would mean that each dedicated staff member would only getting through 10 files per year.  Does that sound plausible?

I don't believe completing the tracker review exercise at BOI will cost anything even remotely like €100m.


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## rodger (12 Jun 2016)

I would be surprised also. That's why I posted this in the first place.

Based on media statements by Aib they are suggesting unprompted by anyone that they are planning to spend approx 300 million on their tracker review.

I explained 100,000 is the gross cost of employing a person on a salary of 50,000

My point when you get over disagreeing with me, is would not the money be better spent reverting customers to tracker?

Is there a ball park figure for putting 3000 Aib customers back on tracker?

Is the world gone mad?

If you doubt the 5 years and you doubt the 300 employees then take it up with Niall Brady Sunday times


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## Sarenco (12 Jun 2016)

Where did AIB say they were planning on spending 300 million (!) on the review process?  

All AIB have said is that they have set aside €102m as a contingency to address any redress payments that might arise following the review process and that it might take five years to fully sort out conduct issues.  Everything else is pure conjecture.

The Central Bank has said that the review exercise must be concluded in 2017.  Lenders do not have 5 years to conclude this exercise.

The purpose of the review exercise is to identify customers that have been impacted by (a) a failure by a lender to honour its contractual obligations; and (b) its failure to comply with any applicable regulatory disclosure or transparency requirements.

In my opinion, this is a worthwhile exercise even if it only results in a relatively small number of borrowers receiving any redress payments.  Sure, there is a cost associated with conducting the review exercise but I can't see how the cost would approach anything even remotely like the sort of numbers you are suggesting.


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## rodger (12 Jun 2016)

It is a worthwhile when it results in the banks returning customers to their right and proper rate, the rate they are entitled to regardless of the number affected.

Meanwhile the banks are prepared to spend millions on the review before a penny goes to customers.


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## Sarenco (12 Jun 2016)

Hopefully we can agree that the process is worthwhile if it identifies any cases at all where a lender failed to honour its contractual obligations to a customer (or even if establishes that there are in fact no such remaining cases).

However, that can only be established following a detailed review of cases that are in scope.  How else can it be established whether customers are paying the right rate as per their contractual entitlements?  Yes, this exercise comes at a material cost to the banks.


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## rodger (12 Jun 2016)

I hope we can agree that the banks are prepared to cheat their customers and spend money covering up their mistakes.


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## Sarenco (12 Jun 2016)

Frankly, that's just a childish comment Rodger.


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## rodger (12 Jun 2016)

where a lender failed to honour its contractual obligations to a customer


= cheat


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## Sarenco (12 Jun 2016)

But how could you possibly know whether a lender has failed to honour it's contractual obligations if you don't review the relevant contracts?  The power of Devine intervention?

The purpose of the current review exercise is largely to identify whether any such cases still exist.


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## PJDCol (13 Jun 2016)

If this is about the contracts situation only then I think most people don't have a leg to stand on. I signed a contact that said I would move to a standard variable rate at the end of the fixed rate. I fully realise that.

However if it turns into a Code of Conduct debate then maybe the Central Bank will make a decision in people's favour. If IIB advertised to brokers (we've all seen the flyers) that the option of going to a "tracker" after fixed rate then the document people signed in relation to this product (fixed rates) clearly didn't give this option. I also have a signed document from one of the biggest brokers in Ireland that lists out the reason why IIB best suits your interest in a mortgage. No 2 on the list is _"should you choose a fixed rate, you will have the choice of another fixed rate when this expires or you can choose a variable or tracker rate"._ Again this option was not actually available. I don't know how much weight that a signed broker document would hold.  

Now I am no Code of Conduct expert but those 2 examples seem like false advertising among other things to me! I've debated the contracts wording of variable rate v tracker already which was also shocking and for me broke Code of Conduct rules but the bank already disagreed with me there!!! Anyway lets just see what happens with Central Bank.


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## bmkearney (13 Jun 2016)

Guys this was my submission  to the FSO in November 2015 and I agree with a lot of what pcoleman. If people could advise me what they think of my argument cheers.


We wish to add the following submissions regarding the contents of the documents received from BOI.

Firstly why have BOI not produced the letter we have sent in our original complaint to yourselves dated August 2008 regarding the Mortgage loan rate reverting to 5.5% representing the Tracker variable rate if no option signed and returned. This letter is very important as it contradicts the argument that BOI are using under Clause 7(b).

We also wish to challenge BOI on Clause 7(b) regarding failure to exercise a choice that the interest rate applicable to the Loan will be a variable interest rate. BOI have clearly not advised if this is a standard,existing,homeloan or tracker variable  rate. This means that BOI are allowed to argue which of the above variable rates the Loan can revert depending on the markets rates at the time to suit BOI. On the same note then surely we are entitled to argue the same. The fact they do not clearly identify what the variable rate under Clause 7(b) refers to, we believe strengthen our case.

As you can see from all of our rate offers letters over the years we have been offered four different types of variable rates by BOI.( Homeloan variable rate,a Standard variable rate, an Existing Variable LTV rate and a Tracker variable ECB+1.25%). So which of the above variable rate option does Clause 7(b) represent or does it represent them all which is win win for BOI.

 We again refer to the offer letter dated August 2008 that BOI were going to revert our Loan to a  variable rate of 5.500%(tracker ECB+1.25%) and not that of the variable rate of 5.790%(homeloan variable). This letter is proof that our Loan was going to revert a Tracker variable rate.

Also the below is a paragraph from the consumerhelp.ie website regarding coming to the end of a fixed rate mortgage term.

_At the end of a fixed rate term, your lender will write to you and outline your options, which may include:
  moving to a standard variable rate
  fixing for another term, perhaps 1,3 or 5 years
moving to a tracker rate - but only if this was offered to you at the time you signed up for the fixed rate. Look at the documentation your lender sent you when you signed up to a fixed rate, as this will detail what your interest rate will revert to after the fixed rate term ends. If a tracker mortgage was one of the options, then your lender must offer you the tracker rate, even if they are no longer widely available. If you do not have the documentation, contact your lender and ask for a copy. 

  If you are unhappy with the options your lender is offering you when your fixed rate term ends or you feel that your options were not explained fully, you can make a complaint._

We have underlined the part that is relevant. We believe this also improves our case as our offer letter dated August 2008 had a tracker as one of the options and also advised the loan would revert to the tracker rate of 5.500% as this was the end of our 2 year fixed rate taking out in August 2006.

For taking the above submissions into consideration we would be most gratefully.


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## todo (14 Jun 2016)

I agree that BOI's definition of a variable rate is very misleading as that clause 7B is included regardless of the type of variable rate.

They rely on special conditions to further define the rate, but if no special condition is included I can see how a consumer could easily think they are on a different type of rate.

When did you take out the mortgage? 
Were you on a tracker and then fixed, and then at the end of the fixed period they put you on svr?

If you were on a tracker and then fixed, then you have a very strong case as your original contract will have the special condition. I would use that special condition as the basis for the definition of what a "Variable Rate" is.

The text you have underlined is very interesting and I think you have a case, BOI should have spelled it out in clear plain simple english what variable rate the mortgage should return to once the fixed period ended. In my opinion just saying it will return to a variable rate is not definitive enough, particularly when they at the time were using that term to describe  a number of different mortgage types.


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## notabene (14 Jun 2016)

Would you do a data protection request on BOI to see what information they have - or do not have as the case may be?

What did your fixed rate agreement say and what did your original mortgage contract say - in mine, with Ulster Bank,  for example, it stated that the tracker was for life of the mortgage & did not specify any conditions, such as fixing where you would be at the loss of this tracker rate. 

The Ombudsman then found that I should have therefor defaulted on to the tracker rate at the end of the fixed period

If a contract is ambiguous the law favours the party who did not draft the contract as the other party drafting it had every opportunity to put exactly what they required in the contract.


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## bmkearney (14 Jun 2016)

todo said:


> I agree that BOI's definition of a variable rate is very misleading as that clause 7B is included regardless of the type of variable rate.
> 
> They rely on special conditions to further define the rate, but if no special condition is included I can see how a consumer could easily think they are on a different type of rate.
> 
> ...



Hey Toto took the mortgage out in Sept 2005 no special condition. Regarding the variable rate the one on my offer letter dated Aug 2008 stated that the variable rate of 5.5% would be applied to the mortgage automatically if I did not select an offer by Sept 2008 and this 5.5% represented the tracker and not the SVR. Central  Bank need to tackling BOI on the wording of Variable Rates as I feel they can use whatever rate suits them and not the customer.


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## todo (15 Jun 2016)

bmkearney said:


> Hey Toto took the mortgage out in Sept 2005 no special condition. Regarding the variable rate the one on my offer letter dated Aug 2008 stated that the variable rate of 5.5% would be applied to the mortgage automatically if I did not select an offer by Sept 2008 and this 5.5% represented the tracker and not the SVR. Central  Bank need to tackling BOI on the wording of Variable Rates as I feel they can use whatever rate suits them and not the customer.



In my opinion BOI are in breach of the Central Banks Consumer Protection code.

Principle 2.6 states "makes full disclosure of all relevant material information, including all *charges*, in a way that seeks to inform the *customer"
*
Your offer letter in August 2008 should have defined what type of "Variable Rate" would be applied.


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## bmkearney (15 Jun 2016)

notabene said:


> Would you do a data protection request on BOI to see what information they have - or do not have as the case may be?
> 
> What did your fixed rate agreement say and what did your original mortgage contract say - in mine, with Ulster Bank,  for example, it stated that the tracker was for life of the mortgage & did not specify any conditions, such as fixing where you would be at the loss of this tracker rate.
> 
> ...



Hey notabene
Thanks I will request freedom of info...because BOI have never reproduced  that offer letter of Aug 2008.


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## bmkearney (15 Jun 2016)

todo said:


> In my opinion BOI are in breach of the Central Banks Consumer Protection code.
> 
> Principle 2.6 states "makes full disclosure of all relevant material information, including all *charges*, in a way that seeks to inform the *customer"
> *
> Your offer letter in August 2008 should have defined what type of "Variable Rate" would be applied.



Exactly...my case is that 5.5%


todo said:


> In my opinion BOI are in breach of the Central Banks Consumer Protection code.
> 
> Principle 2.6 states "makes full disclosure of all relevant material information, including all *charges*, in a way that seeks to inform the *customer"
> *
> ...


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## todo (15 Jun 2016)

Please do let us know the outcome of your case with the FSO.


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## bmkearney (15 Jun 2016)

todo said:


> Please do let us know the outcome of your case with the FSO.



Exactly.
Well in my opinion it does because 5.5% represented the tracker variable rate in the rates box on offer letter but BOI just have variable rate of 5.5% below box as what we would default to if we didn't select a rate ourselves.

FSO has asked everyone if they will put cases on hold till outcome of central bank review so will drag on till probably  end of next year joke.


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## rodger (19 Jun 2016)

1000 employed to review tracker mortgages

http://m.independent.ie/business/pe...staff-working-on-tracker-probes-34811447.html

That's a cost of about €100m per year


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## rodger (24 Jun 2016)

I vastly underestimated

Not saying these are permanent employees because as stated above they're not

But estimates by Charlie Weston show the number employed to be over 1000 across all the banks.

Anyone care to guesstimate what that costs per year?

And then apply for say 5 years?


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## rodger (24 Jun 2016)

How much does it cost to employ 1000 for a few years?

No idea?

Is it included in the provisions made by the banks


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## rodger (24 Jun 2016)

The point being where should the money be spent?

Helping out borrowers

Or continuing to shore up the defence of the bankers


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## Onceagain (11 Jul 2016)

The silence if deafening, anyone know when the central bank are due to report on the tracker review, seems to be taking forever.


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## todo (11 Jul 2016)

They've given them far too much time to deal with this.


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## rodger (11 Jul 2016)

Usually when they say July.

They mean end of July.

But that's just the next update.

Ultimately they have until sometime next year.

It's very stressful.


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## Sarenco (11 Jul 2016)

The Central Bank has stated that it will give a further update on progress at the end of this month (July) but the review process is not expected to be finalised until some time in 2017.


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## notabene (12 Jul 2016)

An update in July, the bank's own reports for the work they are doing at the moment, seeing what customers are involved, is due to the Central Bank on Sept 30th. If you ask the bank, the say no timescale and Ulster Bank's letter in June said an update every 60 days which, to me, indicates it is going to go on for sometime.

To that end, look at ptsb, nearly a year there at this stage, and from what I understand, far from sorted.

@rodger absolutely, extremely stressful.


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