Bank of Ireland encouraging people off trackers onto fixed rates?

Brendan Burgess

Brendan Burgess

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Apparently Bank of Ireland has been sending the attached letter to their customers recently.

As a valued mortgage customer we want to share some interesting findings from research that we carried out recently with homeowners, like you, who have 'a mortgage on a Tracker Rate.

This data conducted by RED C in August 2012, on behalf of Bank of Ireland found that:

  • Customers on tracker rates believe that lower repayments and the rate of interest are the most appealing features of their mortgage


  • A significant proportion (79%) of customers with tracker rates believe ECB rates will increase in the next 5 years

  • The majority of these customers (84%) are concerned about the resulting increased mortgage repayments
If, like these customers, you have concerns about increasing mortgage repayments, we may have options that can offer you more certainty of repayments, at an affordable rate giving you the benefits of
your current low rate but without the risk of a rate increase over the next few years.

We will call you over the next week to discuss the options available to you and answer any questions you may have. If this timeframe is inconvenient for you or if you would prefer for us not to contact you, please phone us at the following phone number 01 6113860.
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This has to be a serious breach of the Consumer Protection Code where the bank is obliged to act in the best interests of its customers

If anyone gets this call, could they try to record it to see what is actually said.
 

Attachments

  • Letter October 2012 Bank of Ireland_mortgage customer.pdf
    185.7 KB · Views: 208
To be fair to the Bank they are at this stage only asking to discuss the position with the clients. I agree that it is likely that the advice given may be somewhat biased towards exiting the Tracker option. However, it is unlikely that the letter itself could be regarded as a breach of the code as the Bank may well be prepared to offer clients some reasonable incentives to exit the Trackers. It would be very naive of them to use this as an arm twisting exercise as that would certainly be a breach of the Code.
Is this a general issue to all those on trackers?
 
I disagree, the bank is implyimg that it can predict the future ie rates will go up, and this is to put a doubt in a persons mind and may make them considerder opting for a fixed rate now when there is no earthly reasaon to do so.

It should have pointed out that ecb rates are at a historical low but as usual in this country the answer is " we can do nothing" ala the big pensions from a bank that was bust, bailed out by us and then used the bail out money to pay vast pensions. You could not make it up.
 
Some less informed people, getting a letter like this, could easily be duped into leaving their tracker and signing up to a much higher fixed rate. Sharp practice on behalf of the banks but nothing new there
 
The fixed rate may not even be higher. They could offer a 5-year fix at the current rate payable on the tracker. This would sound good to some less-informed customers but is a very bad deal for the customer as they'd then revert to the SVR.

Chances are they'll only be paying the current rate for 2-3 years anyway on the tracker.
 
Have a look at the calculations on this thread: http://www.askaboutmoney.com/showthread.php?t=153249

Based on those figures, I think it would be a bad move to switch even if the bank offered you a very low 10-year fix. You would undoubtedly save over the next 10 years - but, over the life of the mortgage, you'd lose out (this is assumming you have 20+ years left on your mortgage).

Anyone who got this letter reading the forum should, if they feel comfortable doing so, give an idea of the term left on their mortgage to give us more data to try and see what the banks strategy is.
 
I have just read Charlie Weston's piece on this.

Bank denies bid to "trick" its tracker customers

Last night a [broken link removed] spokesman explained that a letter it had sent to 200 of its tracker customers was not an attempt to replace their good-value trackers.


It is understood the bank is looking at a pilot project that would see those on trackers who opt for a three-year fixed rate the option of paying just 2.25pc. The five-year rate likely to be offered is 2.5pc.


...
These people would then be able to go back to their trackers after a fixed period.
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I find it hard to believe that this was their intention. The letter says nothing about the rate. I think that they were caught out.
 
If Bank of Ireland are that concerned about "their valued customers" they can add a clause to their offer that they will refund the extra cost if any that their new offer costs over the period that the make the new arrangement covers as well as stating unambiguously that they will allow you to return to your tracker. Why are they not as concerned about people on SVR mortgages. Why is it that you have to contact them if you do not want them to contact you and not the other way around. I appeal to people KEEP YOUR TRACKER. Do not be FOOLED by a smooth talking incompetent from B o I. They should publicly put their figures in the public domain and let them be examined.
 
'Do not be FOOLED by a smooth talking incompetent from B o I. They should publicly put their figures in the public domain and let them be examined'
Well said Dermot.

No bank in this country has it's customers interests at heart and should always be treated with suspicion.
You would be a twit to think otherwise.
The ECB rate may rise in years to come but it's a long way off the SVR rate,
so there is a big margin to work with there before it becomes comparable.

Just because a large portion of customers believe the ECB rate will rise, does not mean it justifies bailing from the good deal they are on.
It's all about the bottom line. SVR's make them more money. End of story.
Another slippy side to banks in the small print in contracts which have proved a minefield for the customer as per the hundreds of posts on this board.
Somone else might know the latin version... 'Let the buyer beware'.
Dont trust them an inch folks.
 
I don't believe Bank of Ireland for one minute either.

But if they offer a borrower on a tracker of ECB + 1% a fix for three years at 2% followed by a return to their tracker of ECB + 1% for the remainder of the term, then that is worth thinking about. That is a big if.
 
Brendan Burgess said:
This has to be a serious breach of the Consumer Protection Code where the bank is obliged to act in the best interests of its customers

.
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And what exactly is going to be done about it by the Ombudsman. Nothing.

The arrogance of the Bank of Ireland is breath-taking, nothing surprising there. They know they can get away with anything. They've plainly tried to dupe Tracker mortgage holders with their initial letter. And now they're backtracking, weaselling their way out that they were going to fix at a very low rate and then put people back on trackers, who are they kidding. They must think they can get away with anything. Actually they can get away with everything. Unprintable expletive.
 
You are probably right in your assumptions that the primary agenda of the Bank is to encourage borrowers off tracker rates. However, as yet no detail has been provided on what the Bank are offering clients to do this. If the offer is attractive enough, it may be beneficial to some clients to fix their rates for a period.
The Bank would want to be particularly stupid to pull a "fast one" on this as the resultant publicity could do them a lot of damage. I'm not discounting this, but would be surprised if they have not anticipated the reaction to any "underhand" shennangians in respect of trackers!
 
Bronte said:
And what exactly is going to be done about it by the Ombudsman. Nothing.

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Hi Bronte

The Ombudsman can't do anything about it at this stage. His job is to hear complaints from individuals. If someone is conned by BoI out of a tracker, and they complain to the Ombudsman, the Ombudsman will tell BoI to give them their tracker back.

I understand that the letter has been referred to the Central Bank and I have no doubt that they will remind Bank of Ireland of their duties. If anyone has already switched from their tracker to a fixed, the Central Bank will tell BoI to explain it properly and to revert them to their tracker if that is in their best interests.
 
44brendan said:
The Bank would want to be particularly stupid to pull a "fast one" on this as the resultant publicity could do them a lot of damage. I'm not discounting this, but would be surprised if they have not anticipated the reaction to any "underhand" shennangians in respect of trackers!
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As I see it, the bank has messed up badly on this, whatever way you look at it.

1) It they were trying to pull a fast one, which I believe that they were, they had no chance of getting away with it. The Central Bank and Ombudsman would restore people to their trackers.

2) If they were genuinely trying to develop a good product for their customers, then they should have announced that product generally and have it open to public analysis and evaluation.

But why on earth would they want people on trackers to fix, even at very low fixed rates? They are better off leaving people on trackers as the borrower then has the option of paying it off early or increasing their repayments.

Whatever way you look at it, this was stupid by Bank of Ireland.
 
I agree with you Brendan. Why do they not publish the details of the product. I do not like this one to one type of thing on the phone. It is high time that financial institutions showed full transparency. I genuinely fear that there are people out there that could grasp at anything that looks better because of the packaging and playing on peoples fears. Bank of Ireland should be challenged by the media or by people with access to the media to put all the terms and conditions of this product in the public domain or withdraw it altogether.
 
According to [broken link removed] article in last Friday's Irish Times


The bank said that if customers opted to move off tracker rates, it was clearly outlined they could move back to the tracker rate after three or five years on a fixed rate.
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I'm not suggesting we should trust BoI or anything, but it wouldn't be the first time the Indo sensationalised a story!
 
I would not see that the greatest threat to people with tracker mortgages is over the next 3 to 5 years. I would think that over the next 3 years the ECB rate is going to remain quite low due to the economic mess that europe is in. If they had a genuine concern for their customers they should be looking at making this "offer" to their SVR mortgage holders and if it is that good the tracker mortgage holders can avail of this as well. I am very very wary of their FAKE CONCERN FOR THEIR TRACKER RATE HOLDERS. Advertise in public what your offer is before you start contacting Tracker holders. If a poster gets one of these letter please post it here.
 
Mrs Vimes said:
I'm not suggesting we should trust BoI or anything, but it wouldn't be the first time the Indo sensationalised a story!
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In general I'd agree with you, but I'd trust the Indo before a bank any day of the week. There is no way on earth that the BofI were going to offer people fixed rates and also continue their trackers, it would not make commercial sense.

The banks think they can do anything, that nobody, no government or regulator or central bank will ever do anything more than slap them on the wrist and how right they are on that score. So when you are that organisation you can chance anything. Not only that, even though we apparently live in a capitalist society, the rules of capitalism do not ever apply to banks. Banks lose - taxpayers pay, banks gain - they line their own pockets.
 
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