AIB Loan facility states it would track ECB main refinancing operations Minimum Bid Rate, it did not!

Yes. And that was all because AIB didn't notify you of something that the World and his mother already knew.

Brendan
 
DARKMATTERS said:
The significant change in ECB monetary policy that was announced on the 8th October 2008 when the ECB announced a change from the ECB minimum bid rate to the fixed tenders full allotment rate signaled to the Eurozone Banks and others that the ECB was going to prop up the inter bank money market and become the lender of first choice as oppose to being the lender of last resort. ......
The fact that AIB failed to inform me of this significant change in the interest rate applicable to my loans as contractually obligated to, was unreasonable and unfair as well as being opaque, and contributed significantly to my loss of opportunity (ie to liquidate some or all of my portfolio). This is my loss.
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You summarise the change well.

However, I don't see that AIB had a responsibility to advise you on the spectrum of potential outcomes and financial consequences associated with an ECB policy change. That policy and the rationale was publish in the ECB website. AIB did not hide it from you.

You state there was a significant change in interest rate applicable on your loan. This is factually not the case.

Did they fail to honour the exact wording of the contract -yes*. Did they break the spirit of it - no.

*I'm still not sure there isn't an advert in a paper somewhere
 
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skrooge said:
You summarise the change well.

However, I don't see that AIB had a responsibility to advise you on the spectrum of potential outcomes and financial consequences associated with an ECB policy change. That policy and the rationale was publish in the ECB website. AIB did not hide it from you.

You state there was a significant change in interest rate applicable on your loan. This is factually not the case.

Did they fail to honour the exact wording of the contract -yes*. Did they break the spirit of it - no.

*I'm still not sure there isn't an advert in a paper somewhere
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Hi Skrooge,

Clause 5.3 within my loan facilities specifically states “ the Bank shall give notice to the Customer of any variation in the interest rate applicable to the Mortgage Loan, either by specific notice in writing served on the Customer in accordance with the Lender’s Mortgage, or generally by newspaper advertisement published in at least National Daily Newspaper. Such notice or advertisement shall state the varied interest rate and the date from which the varied interest rate shall apply.”

This they failed to do. If you can provide me with a newspaper article by the Bank from this period I will stand corrected, but I would have thought such a newspaper article would have been previously exhibited by the Bank at such High Court proceedings. I don’t think the average Bank Mortgage customer would be perusing the extensive press releases from the ECB. I say from my reading of the Bank’s drafted clause that it was incumbent on the Bank to so inform me of this change.
 
That reads to me as if they will inform you when the interest rate rises or falls, not when the ECB changes the name of a reference rate.

Brendan
 
Brendan, with all due respect to you that is not my reading of the clause, particularly when looking at the facility as a whole (which you do not have the benefit of).

Variation from the dictionary means;

“a change or slight difference in condition, amount, or level, typically within certain limits.”

Therefore the variation by the ECB regarding the main refinancing rate/ rate procedure in October 2008 is encompassed within the provisions of clause 5.3. of my various loan facilities. This is particularly more pertinent as clause 3.6.1 within the various facilities states;

“ The Tracker rate is made up of two parts
(A) the European Central Bank’s main refinancing operations minimum bid rate; (”ECB”) which is variable and
(B) the Tracker Margin as stated in Part 1 of the Particulars of Offer of Mortgage Loan, subject to 3.6.3 below.”

Three separate High Court Judges have sent this matter to full plenary hearing as they must believe there is a reasonable defense for the borrower to rely on.

Also, if a complaint is made to the FSPO about this matter, it has a unique hybrid jurisdiction within the Irish State so it can also find against the Bank regarding the Bank’s conduct regarding this issue on matters such as non transparency, improper conduct etc..
 
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DARKMATTERS said:
Also, if a complaint is made to the FSPO about this matter, it has a unique hybrid jurisdiction within the Irish State so it can also find against the Bank regarding the Bank’s conduct regarding this issue on matters such as non transparency, improper conduct etc..
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The Ombudsman is characterised by common sense. He would dismiss this complaint out of hand.

Brendan
 
Sorry to burst your bubble, but my complaint and other similar complaints are already before the FSPO and have been accepted as valid complaints, they have been assigned complaint numbers etc. They have not been dismissed out of hand as you allege. They have all been put on hold depending the outcome of the court cases as previously referred to. This application was made by AIB.
 
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we can toss this back and forth but what it will come down to is the interpretation of the contract and materiality of the change in the ECB's refinancing operations. As you say its before the courts so we shall see who is right. If you are right it will effect a great many people.

Looking at the case mentioned above paragraph 17 jumps out - they relate to the banks point of view:

"[the defendant] confuses the interest rate applicable with the tendering procedure and that the ECB MRO has always applied"

If you follow their argument you shouldn't have been charged any interest on your mortgage after October 2008 o_O - though paragraph 24 counter thats

What does your contract say your rate should default to if their is no ECB rate?
 
DARKMATTERS said:
are already before the FSPO and have been accepted as valid complaints, they have been assigned complaint numbers etc.
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That means absolutely nothing. I am sure the guy who complained that he wasn't offered a tracker although his neighbour had one was also treated with the respect he deserved.

Brendan
 
Hi Skrooge ,

My AIB facilities have no default clause if the ECB main refinancing operations minimum bid rate becomes unavailable.
 
Brendan Burgess said:
So you had a tracker with AIB.
The reference rate changed.
You were not aware of it.
They didn't notify you of it.

And you say, that you would have had the foresight to...
1) Gone to a professional advisor
2) She would have told you that this meant that property prices were going to crash
3) You would have believed her
4) You would have sold all your property at the inflated prices

And, of course, you can offer in evidence the advice given by lots of financial advisors at the time to their clients that, despite having a cheap tracker, they should sell their property?

And people wonder why the Financial Services Ombudsman rejects 90% of complaints!

Brendan
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Brendan,
I am dismayed. There was a breach of contract by the bank. How could anyone offer in evidence any advice given by other financial advisors at the time that despite having a cheap tracker they should sell the property regarding this particular situation? I doubt any financial advisor at the time would have been aware of the significant change in monetary policy stance by the ECB, particularly so, when the AIB itself failed to notify its respective customers of this variation in the interest rate applicable to its customers as obliged to do so. The wording of DARKMATTERS notice clause within his/her facility is unequivocal, in that it was incumbent on the Bank to so inform of any variation in the interest rate applicable to his/her Mortgage Loan. There was a variation in the interest rate applicable to DAKMATTERS loan (as specifically described by the Bank) from the 15 October 2008 going forward. This is a fact or am I missing something?
 
Palladin said:
This is a fact or am I missing something?
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There is a rule when claiming damages for breach of contract that (1) the offended party has suffered loss and (2) that loss has to have been substantially caused by the breach. This is what is known as causation.

That the bank failed to notify the customer as per its contractual requirement to do so may well have constituted a breach of contract, but did that sole breach cause the damages alleged by the complainant? I doubt it.

Just because a party breaches a contract does not automatically equate to substantial damages being claimable by the offended party.
 
Jayom75 said:
There is a rule when claiming damages for breach of contract that (1) the offended party has suffered loss and (2) that loss has to have been substantially caused by the breach. This is what is known as causation.

That the bank failed to notify the customer as per its contractual requirement to do so may well have constituted a breach of contract, but did that sole breach cause the damages alleged by the complainant? I doubt it.

Just because a party breaches a contract does not automatically equate to substantial damages being claimable by the offended party.
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Hi Jayom75,

AIB by their own drafted contract were obliged to tell me of any variation in the interest rate applicable to my mortgage. The Bank contractually set out that my mortgage would follow the ECB main refinancing minimum bid rate and no other rate. The bank failed to put in a default clause. I thought that to claim damages in relation to this issue in court, I had to prove the damages were proximately caused by the breach and that such damages were foreseeable by the bank when drafting the contract. I would have thought that by failing to put in a default clause and by not informing me of the change, the Bank’s conduct helps proves my case.

However, I am not going to court, I am taking the FSPO route, where, should the FSPO uphold my complaint or part thereof, they can find that the bank’s conduct was contrary to law, but also, that the conduct complained of was unjust or unreasonable or was otherwise improper. What do you think, should the bank have informed me and at least brought my attention to same?
 
NoRegretsCoyote said:
For something that happened in 2008?

Are you not out of time?
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Hi NoRegretsCoyote,

No section 51 (2) and (3) of the FSPO Act can be invoked as the bank concealed the change from me in breach of its own contract. I only became aware of the issue in 2020 when I went to a company that properly constructs complaints against the Banks to the FSPO. It informed me of the issue as well as other issues regarding the bank’s conduct.
 
Speaking with a counsel the other day, who informed me that a summary judgment debt matter relating to AIB was adjourned generally by the Court until after the minimum bid rate issue was fully heard at a plenary hearing (set down for December this year). The borrower’s defense team had included the minimum bid rate argument as part of the borrower’s defence to summary judgment in this instance.
 
Greetings DARKMATTERS,

have you approached the Central Bank or the ECB about this matter? Appears to me that it must affect 1000's of borrowers in Ireland.
 
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