Hi Zero, that's very true, at no point we're AIB staff told that the preferential rate was a fixed term and not a fixed rate, that's not specified in the T&C's or LOS either. There were numerous references to the rate being "Fixed" though, both in the LOS and the application form so hopefully the ombudsman will consider this sufficient to rule in our favour.
Key Post AIB staff, ex-staff and the prevailing rate issue
- Thread starter Brendan Burgess
- Start date
Hi Brendan, I am reading the ombudsman decision on staff preferential rate case. 2023-0131.
Here they refer to the rate as a “static rate” again and continue to reference the staff preferential rate as variable throughout the decision. They include the chart from the letter of offer that calls it a variable annuity. They never include the terms and conditions where they refer to the staff rate as staff preferential fixed rate numerous times.
This is actually a good example of how confusing the staff rate is. The customer here is moved to the standard variable rate as part of the global rate swap in 2009 and they then decide to go back on to the staff rate in 2012.
In 2018 the customer leaves the company, and as per terms and conditions when staff leave they are removed from the staff rate to the standard variable rate.
When they are outlining this part on the decision on page 21.
“In circumstances where the complainant ceased employment with the provider in Dec 2018, the staff preferential fixed interest rate was removed from the complainants mortgage loan account and the provider applied its standard variable interest rate”.
They acknowledge the ambiguity and confusion and accept varying references to the staff rate and they even say…….that a new letter of offer should have been drafted.
Acknowledging the contract is confusing , unclear and even to go as far as to say a new contract should have been issued.
The word “static” was never communicated anywhere to a customer, in any contract or any letter. I think this word seems to have been created for this staff rate scenario and these cases.
But still reject the complaint overall. Very disappointing.
Here they refer to the rate as a “static rate” again and continue to reference the staff preferential rate as variable throughout the decision. They include the chart from the letter of offer that calls it a variable annuity. They never include the terms and conditions where they refer to the staff rate as staff preferential fixed rate numerous times.
This is actually a good example of how confusing the staff rate is. The customer here is moved to the standard variable rate as part of the global rate swap in 2009 and they then decide to go back on to the staff rate in 2012.
In 2018 the customer leaves the company, and as per terms and conditions when staff leave they are removed from the staff rate to the standard variable rate.
When they are outlining this part on the decision on page 21.
“In circumstances where the complainant ceased employment with the provider in Dec 2018, the staff preferential fixed interest rate was removed from the complainants mortgage loan account and the provider applied its standard variable interest rate”.
They acknowledge the ambiguity and confusion and accept varying references to the staff rate and they even say…….that a new letter of offer should have been drafted.
Acknowledging the contract is confusing , unclear and even to go as far as to say a new contract should have been issued.
The word “static” was never communicated anywhere to a customer, in any contract or any letter. I think this word seems to have been created for this staff rate scenario and these cases.
But still reject the complaint overall. Very disappointing.
Brendan Burgess
Founder
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- 52,091
Well spotted Zero.
That is a pity. I presume that this will set a precedent for other cases, as the complainant in this case seems to have argued her case well.
Here are the key bits from the decision.
It is clear to me that the Mortgage Loan Offer dated 01 August 2008 in relation to mortgage loan account ending 8039 envisaged a staff preferential interest rate of 3% to apply to the mortgage loan that was variable in nature. The Letter of Offer specifically outlined the “Loan Type” to be a “Variable Annuity”. The staff preferential interest rate in this case made no reference to varying in accordance with variations in the European Central Bank refinancing rate (the “ECB rate”), rather it was a variable rate which could be adjusted by the Provider. For staff preferential interest rate loans, the variable rate “remained static” at 3%. If the staff customer resigned or was dismissed from the Provider, the mortgage loan would move to the Provider’s standard variable interest rate. The Complainants accepted the Mortgage Loan Offer dated 01 August 2008 having confirmed that they had read the terms and conditions applicable to the mortgage loan, to include the applicable interest rate.
…
The Complainants submit that they had an entitlement to be offered a tracker interest rate in respect of their mortgage loan account ending 8039 when it was switched from the staff preferential rate of 3%. In this regard, the Complainants appear to be of the view that the staff preferential interest rate was “fixed” in nature, but they were not offered a tracker interest rate by the Provider despite coming off a fixed rate of interest.
I note that Mortgage Loan Offer dated 01 August 2008 contains references to both the words “fixed” and “variable”. Part 1 refers to the “loan type” as a “variable annuity”. In the Special Conditions there is a reference to the “Staff Preferential Fixed Home Loan interest rate of 3%” and the Special Conditions also includes certain detail disapplying General Condition 3.3, which relates to fixed interest rate early break costs.
I accept that these varying references create a limited degree of ambiguity as to the nature of the interest rate, when looked at in isolation and I am of the view that in this respect the Provider should have drafted the Mortgage Loan Offer with more precision to ensure there could be no ambiguity.
However, having considered the evidence before me, when the details in the Mortgage Loan Offer dated 01 August 2008 in relation to mortgage loan account ending 8039 are considered in the round it appears that the mortgage loan was one that was variable in nature given that it was described as a variable annuity loan. The reference to the term “fixed” in this context refers to the fact that the staff preferential interest rate would remain static or fixed at the rate of 3% for the term of the loan, while the First Complainant remained in the employment of the Provider.
...
Having considered the Complainants’ mortgage loan documentation in its entirety, I am satisfied that the Provider was under no obligation to apply a tracker interest rate to mortgage loan account ending 8039 in January 2009, or at any other time.
For the reasons set out in this Decision, I do not uphold this complaint.
That is a pity. I presume that this will set a precedent for other cases, as the complainant in this case seems to have argued her case well.
Here are the key bits from the decision.
It is clear to me that the Mortgage Loan Offer dated 01 August 2008 in relation to mortgage loan account ending 8039 envisaged a staff preferential interest rate of 3% to apply to the mortgage loan that was variable in nature. The Letter of Offer specifically outlined the “Loan Type” to be a “Variable Annuity”. The staff preferential interest rate in this case made no reference to varying in accordance with variations in the European Central Bank refinancing rate (the “ECB rate”), rather it was a variable rate which could be adjusted by the Provider. For staff preferential interest rate loans, the variable rate “remained static” at 3%. If the staff customer resigned or was dismissed from the Provider, the mortgage loan would move to the Provider’s standard variable interest rate. The Complainants accepted the Mortgage Loan Offer dated 01 August 2008 having confirmed that they had read the terms and conditions applicable to the mortgage loan, to include the applicable interest rate.
…
The Complainants submit that they had an entitlement to be offered a tracker interest rate in respect of their mortgage loan account ending 8039 when it was switched from the staff preferential rate of 3%. In this regard, the Complainants appear to be of the view that the staff preferential interest rate was “fixed” in nature, but they were not offered a tracker interest rate by the Provider despite coming off a fixed rate of interest.
I note that Mortgage Loan Offer dated 01 August 2008 contains references to both the words “fixed” and “variable”. Part 1 refers to the “loan type” as a “variable annuity”. In the Special Conditions there is a reference to the “Staff Preferential Fixed Home Loan interest rate of 3%” and the Special Conditions also includes certain detail disapplying General Condition 3.3, which relates to fixed interest rate early break costs.
I accept that these varying references create a limited degree of ambiguity as to the nature of the interest rate, when looked at in isolation and I am of the view that in this respect the Provider should have drafted the Mortgage Loan Offer with more precision to ensure there could be no ambiguity.
However, having considered the evidence before me, when the details in the Mortgage Loan Offer dated 01 August 2008 in relation to mortgage loan account ending 8039 are considered in the round it appears that the mortgage loan was one that was variable in nature given that it was described as a variable annuity loan. The reference to the term “fixed” in this context refers to the fact that the staff preferential interest rate would remain static or fixed at the rate of 3% for the term of the loan, while the First Complainant remained in the employment of the Provider.
...
Having considered the Complainants’ mortgage loan documentation in its entirety, I am satisfied that the Provider was under no obligation to apply a tracker interest rate to mortgage loan account ending 8039 in January 2009, or at any other time.
For the reasons set out in this Decision, I do not uphold this complaint.
Isn’t there staff cases gone to the high court? Beyond this stage? Do we know when to expect a decision on these?
I think the previous response letters we have seen have much the same replies from staff business as above.
But now the ombudsman saying a more precise mortgage loan offer should have been drafted and acknowledging the contract was ambiguous should hopefully favour the customers.
I think this case is very good because the letter of offer in 2008 called the rate both fixed and variable. The agree that there is varying references.
But still in 2018 when the staff left the company they continue to call it the staff preferential fixed rate.
And the use of the word “static” where and when did this word start getting used , I believe only for these letters.
I think the previous response letters we have seen have much the same replies from staff business as above.
But now the ombudsman saying a more precise mortgage loan offer should have been drafted and acknowledging the contract was ambiguous should hopefully favour the customers.
I think this case is very good because the letter of offer in 2008 called the rate both fixed and variable. The agree that there is varying references.
But still in 2018 when the staff left the company they continue to call it the staff preferential fixed rate.
And the use of the word “static” where and when did this word start getting used , I believe only for these letters.
Brendan Burgess
Founder
- Messages
- 52,091
Hi Zero
I agree that the case is good, but it's not what you or I think which matters. The Ombudsman has decided against the arguments put forward in this case.
I am not aware of a High Court case.
Brendan
I agree that the case is good, but it's not what you or I think which matters. The Ombudsman has decided against the arguments put forward in this case.
I am not aware of a High Court case.
Brendan
There is 2 forums on this topic. The other one is AIB ex staff - getting €1,650 compensation.
On that forum in 27.07.22 post #133 it referenced the ombudsman or high court decision.
I thought maybe people had moved the cases along further to the high court.
If this person wants to appeal now after the ombudsman decision , what would be the next step?
I’m suprised the ombudsman hasn’t taken the “contra proferentum” rule in this case. Or is that for the next phase?
On that forum in 27.07.22 post #133 it referenced the ombudsman or high court decision.
I thought maybe people had moved the cases along further to the high court.
If this person wants to appeal now after the ombudsman decision , what would be the next step?
I’m suprised the ombudsman hasn’t taken the “contra proferentum” rule in this case. Or is that for the next phase?
Brendan Burgess
Founder
- Messages
- 52,091
For future reference to save people searching...
If you right click on the #133 you will get
Then right click on Copy Link address.
Then you can paste that address into a post e.g.
If you right click on the #133 you will get
Then right click on Copy Link address.
Then you can paste that address into a post e.g.
AIB - Aib ex staff - getting €1,650 compensation
Hi I have both a Staff mortgage and a Tracker mortgage I contacted staff business today in relation to the staff mortgage. The advisor stated the mortgage was like the thread had mentioned a variable mortgage. He stated we were only informed of changing our rate in Jan 2009 due to BIK only...
www.askaboutmoney.com
Brendan Burgess
Founder
- Messages
- 52,091
Anyway, if that is the post to which you refer, I say that it will be up to the Ombudsman or the High Court to decide.
I am not aware of any case going to the High Court.
The person whose complaint was rejected by the Ombudsman should not go to the High Court. Their chances of success are slim.
It would be much better for someone who has not gone to the Ombudsman to go directly to the High Court.
Brendan
I am not aware of any case going to the High Court.
The person whose complaint was rejected by the Ombudsman should not go to the High Court. Their chances of success are slim.
It would be much better for someone who has not gone to the Ombudsman to go directly to the High Court.
Brendan