# AIB - October 2008 date - Redress rejected



## aibredress (3 Feb 2020)

Hi All,

Just wanted to run through the situation and have BDO and have come back and rejected our claim for redress. We are under the cohurt of the tracker redress and were given €1,650.00. Our case is slightly different from a lot of people as our fixed-rate changed in October 2008.

Our argument was based on the following:

The bank is trying to state that relevant figure applicable to us is 7.9%, but as noted in the document attached it clearly shows the rate of *5.9% in October 2008* (appendix 1), the time our fixed-rate ended and this is what is applicable to our mortgage.* (The document was the note from the booklet issued to us)*
The 5.9% figure is made up of the tracker rate plus the ECB rate.  The ECB rate was 4.25% (appendix 2), so if we deduct the ECB rate from the rate of is 5.9% it gives us a tracker rate of 1.65%.
5.9% (banks rate)
-4.25% (ECB Rate)
*1.65% (Tracker rate)*

So far I would deem this be pretty straight forward. I then decided to undertake the following example showing how I was impacted:



Date Rate changeECBAIB TrackerAIB SVR 1.65​Rate difference5​15 October 2008​3.75​5.40​-0.40​4.5​12 November 2008​3.25​4.9​-0.4​3.75​10 December 2008​3.50​5.15​-1.4​3.25​21 January 2009​2.00​3.65​-0.4​2.75​11 March 2009​1.50​3.15​-0.4​2.5​08 April 2009​1.25​2.9​-0.4​2.25​13 May 2009​1.00​2.65​-0.4​2.25​01 January 2010​1.00​2.65​-0.4​2.75​30 March 2010​1.00​2.65​0.1​3.25​11 August 2010​1.00​2.65​0.6​3.25​01 January 2011​1.00​2.65​0.6​3.86​13 April 2011​1.25​2.9​0.96​3.86​13 July 2011​1.50​3.15​0.71​3.86​09 November 2011​1.25​2.9​0.96​3.86​14 December 2011​1​2.65​1.21​3.86​01 January 2012​1.00​2.65​1.21​3.86​11 July 2012​0.75​2.4​1.46​3.86​01 January 2013​1.00​2.65​1.21​3.86​08 May 2013​0.5​2.15​1.71​3.86​13 November 2013​0.25​1.9​1.96​3.86​01 January 2014​0.25​1.9​1.96​3.86​11 June 2014​0.15​1.8​2.06​3.86​10 September 2014​0.05​1.7​2.16​4.49​0.05​1.7​2.79​4.25​0.05​1.7​2.55​4.25​0.05​1.7​2.55​4​1.65​2.35​3.75​1.65​2.1​3.75​0​1.65​2.1​3.5​1.65​1.85​3.5​0​1.65​1.85​3.15​1.65​1.5​3.15​1.65​1.5​3.15​1.65​1.5​


Even with all this information, it was still rejected. I even went further and noted down the amounts we were paying the difference, both plus, and minus and worked out how much we are due.

We are really confused about how BDO rejected the claim as they sate that we would have not been any better of.

Any views would be greatly appreciated.

We will be looking to go to the FOBS, but will wait as per the comments from Brendan.


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## Brendan Burgess (3 Feb 2020)

Hi

First of all, the Appeals Panel issued the same rejection letter to all customers who appealed the €1,615.  Either they did not read the complaints or they did not understand them.

Let me see if I understand your argument:

This is what I see in the Q&A:






I don't see "5.9%" written down anywhere, but you can read it from the graph.  If you have it in writing from AIB, you might post it here.

Up to 14 October 2008, the ECB rate was 4.25%
From 15 October, it was 3.75%

Before your fixed rate expired you _should _have received a letter offering you a tracker rate including the margin of 5.9%.
But the ECB rate was either 4.25% or 3.75% depending on the date.
So your tracker margin was either 1.65% or 2.15% depending on the date.

This is the wording of the Appeals Panel decision

"The Panel has also found that even if a tracker mortgage at the then prevailing rate had been offered to the borrower at the end of the fixed term period that the borrower would not have suffered any loss. "

While this is incorrect generally, it is clearly incorrect in your case.  Had you been offered and accepted a tracker at 5.9% instead of an SVR at 2.5%, you would have been far better off in the long term.

Today you would be paying a rate of 1.65% instead of the SVR of 3.15%.

Brendan


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## Mayoress (3 Feb 2020)

Hi Brendan,
Can we contact the central bank and make them aware of the appeals panel decisions & maybe they might start an investigation.


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## aibredress (3 Feb 2020)

Hi Brendan,

Thanks for your reply, please see clarification:

We do NOT have the 5.9%, but used the graph and bar chart as you attached above.

Our fixed-rate ended on the 13th of October, so the 3.75% was applicable, that is what we used as basic maths.

"The panel was satisfied that the bank was contractually obliged to offer us a tracker mortgage at the end of our fixed period"
"...The panel was satisfied that the bank did not have an obligation to offer an element of the rates prevailing when the* mortgage was first enterered too.....*" - T*his is a copy and past from BDO as at no time did we argue this, we just argued the rate that we were due as per the documents issued to us by the bank, can some explain if I'm going crazy on this.*

"....the prevailing rate of such a tracker mortgage would have equaled or exceeded the standard variable rate or fixed rate"....

That is what we have argued and I sent the excel spreadsheet showing the different rates over the time of over mortgage, with our tracker rate and the variable rate.

I feel that BDO did not even look at the document we sent showing this.

I would love to phone up BDO and ask for an oral review and ask them to explain there decision.


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## Brendan Burgess (3 Feb 2020)

Please note that BDO is only acting as the administrator to the Panel which is independent.  You have no argument with BDO, as such.

You are not going crazy.  The Panel is responding to arguments you did not make and not responding to the arguments that you did make. 



aibredress said:


> "....the prevailing rate of such a tracker mortgage would have equaled or exceeded the standard variable rate or fixed rate"....



This is the key bit which shows that the Panel simply does not understand what a tracker mortgage is. 
The SVR was 5.5% on 13 October 2008 the date your fixed rate ended. 
The ECB rate was 4.25% 
So had you been offered a "tracker mortgage [which] equalled the SVR" you would have been offered a tracker rate of 5.5% 
So your margin would have been 1.25%.

So you have suffered serious financial losses. 

Brendan


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## Brendan Burgess (3 Feb 2020)

When did you get the letter of rejection from the Appeals Panel? 

In any event, I think you don't need to do anything just yet. 

The Ombudsman will publish some decisions on the Prevailing Rate issue in general in the coming weeks or months. 

Your circumstances are unusual as your fixed rate ended so soon after they had withdrawn trackers for new customers. 

But when you see the Ombudsman's ruling, you will be better informed then as to whether there is any need to take a case to the Ombudsman or if there is any point in taking a case to the Ombudsman.

Brendan


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## aibredress (3 Feb 2020)

Also, we never received a letter from the bank in regard to the various options open to us. But what I am confused about is that we used information that the bank supplied in the redress document, but BDO is not looking at this and saying that we looked for a rate that was due at the start of our mortgage, even though this is not the case.


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## aibredress (3 Feb 2020)

We received the letter on Friday evening.

I feel that BDO should have some case to answer as they are not reading each case individually. Due to our case being so close to the cut-off and even using the information that was supplied to us, they have ignored this. I also proved that over the term of the mortgage we are overpaying and this was shown with the table that showed the ESB rates and the tracker rate that we took to be applicable. 

I took used the dates of the ECB rate and the figure from the bank's document.

5.9% (banks rate)
-4.25% (ECB Rate)
*1.65% (Tracker rate)* 

The variable rate in October that was applicable to us was 5%, the dates are so close, it took time to get all the information together.

But we will just hold and see what the Ombudsman says.


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## Mayoress (3 Feb 2020)

I rang the ombudsman office today & they are hoping to have some  decisions by the 10th of this month or before. Here’s hoping the prevailing rate issue will be in it.


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