AIB Can an AIB Prevailing Rate customer try to get a tracker rate and further compensation?

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thedman

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Hi guys, just wondering what people opinions on this were.

Obviously, a lot of people were cheering when the announcement was made earlier in this year, and again since yesterday as the balance reductions began to be applied.

However, I am a little confused on this. While the current offer from AIB is certainly a significant step in the right direction compared to the 1615 offer, and a big thank you to Brendan for pushing it this far, unless my calculations are all messed up, this offer still falls far short of complete redress.

While I am waiting on the actual letter from AIB to contain the specifics, the fact that they already applied the balance reduction appears to suggest that AIB considers me as having accepted their offer, and will not be pursuing this further. But, by all estimates, especially when you take into account that they are still not restoring the tracker, this offer ranges from one-third to less than a quarter of the overall cost to (in my case anyway) of not having been put on a tracker in the first place.

So, if you are cheering, why is it?
  • You had given up all hope, so this offer is a lot better than nothing/what you expected?
  • You haven't calculated how much all this is costing you, so assumed that this compensation was roughly equal to the full amount?
  • You didn't think you had much of a case, so are happy to receive any compensation?
  • You see this as a "step in the right direction" or a "stepping stone" on the journey to full redress?
Ultimately, I guess, what I am asking is, are people regarding the case as closed as a result of this offer, or are people looking to fight on for full redress and restoration of their tracker rate?

P.S. Without having received the letter, it may be difficult to answer this, but does anybody know if accepting this offer means you cannot pursue further? Or can you accept what is being offered today, but still continue to escalate your case?
 
Hey man

Good questions and we won't know the answers until AIB writes to everyone.

In all the previous redress cases, the write down and compensation was paid to the borrower and was theirs to keep. They could then make an appeal to the Appeals Panel for further compensation.

I don't expect this to be any different.

You have got your write down. You will get a cheque for the interest.

1) If you feel that this caused you distress, then I expect that you will be able to apply for compensation. But we don't know the mechanism yet. Hopefully it will be directly to AIB. If they don't make a satisfactory offer, then you can go to the Ombudsman. But even if your appeal fails, you should get to keep what you have.

2) In particular, people who lost their home will have to get some serious compensation.

3) If you think that you should be on a tracker for the remaining term.

The Ombudsman has made his decision on this. So I see no point at all in making a complaint to him on this issue. He will, of course, listen to your complaint in the normal way and he does treat every complaint on an individual basis. But he has carefully considered this issue, so there is little point in you trying to get him to change his mind.

However, the High Court may well take a different view from the Ombudsman. I understand that there are a few cases already in the system. But you could always lodge your own case.

My guess is that AIB will settle the existing cases generously but subject to a confidentiality agreement. They will not want to run the risk of a High Court judge finding against them and creating a precedent.

But there is no hurry. Wait and see what the letter from AIB says.

Brendan
 
thedman said:
But, by all estimates, especially when you take into account that they are still not restoring the tracker, this offer ranges from one-third to less than a quarter of the overall cost to (in my case anyway) of not having been put on a tracker in the first place.
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Surely that can't be right? My calculation was that this redress would amount to around 80% of the value of being put on a tracker at ECB +1.5% (provided AIB's variable rates stay as close to this tracker rate as they currently are). Will vary between accounts I suppose but your estimation seems very low.
 
blue_steel said:
Surely that can't be right? My calculation was that this redress would amount to around 80% of the value of being put on a tracker at ECB +1.5% (provided AIB's variable rates stay as close to this tracker rate as they currently are). Will vary between accounts I suppose but your estimation seems very low.
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I have received just over 22K in a balance reduction, and expect approx 10K in interest repayment. However, if I had been on a tracker of ECB +1.5% all along, making the same repayments AIB took from me (consider them forced over-payments), my balance today would be 50K lower. And that lower balance would be on a tracker for the remaining term. Assuming rates remain unchanged for the remainder of the term (unlikely, but all we have to go on), I will pay 60K more interest on the new balance at SVR, than I would at the -50K balance on a tracker.

Never underestimate the power of compound interest!

@Brendan. Are you in contact with those taking the high court case. I am reluctant (but haven't ruled it out!) to go on my own due to costs etc. It is good that you think we will likely be able to continue to pursue this case. Am definitely happy to escalate to the Ombudsman - still waiting on the final response from the BDO.
 
thedman said:
I have received just over 22K in a balance reduction, and expect approx 10K in interest repayment. However, if I had been on a tracker of ECB +1.5% all along, making the same repayments AIB took from me (consider them forced over-payments), my balance today would be 50K lower. And that lower balance would be on a tracker for the remaining term. Assuming rates remain unchanged for the remainder of the term (unlikely, but all we have to go on), I will pay 60K more interest on the new balance at SVR, than I would at the -50K balance on a tracker.

Never underestimate the power of compound interest!

@Brendan. Are you in contact with those taking the high court case. I am reluctant (but haven't ruled it out!) to go on my own due to costs etc. It is good that you think we will likely be able to continue to pursue this case. Am definitely happy to escalate to the Ombudsman - still waiting on the final response from the BDO.
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Did you have the 1.5% in your documents? That would be the golden ticket for you if you had.

Most of us in the cohort had the clause, not the margin or any tracker margin in our docs.

Any of us with mortgages from 2008 onwards are absolutely blessed today because AIB absolutely made a massive mistake in 2008 withdrawing trackers rather than making the margin say 2.5/3%. There still may have been a breach but there would be no value in it for customers, the redress numbers would be way smaller in volume..
 
thedman said:
have received just over 22K in a balance reduction, and expect approx 10K in interest repayment. However, if I had been on a tracker of ECB +1.5% all along, making the same repayments AIB took from me (consider them forced over-payments), my balance today would be 50K lower. And that lower balance would be on a tracker for the remaining term. Assuming rates remain unchanged for the remainder of the term (unlikely, but all we have to go on), I will pay 60K more interest on the new balance at SVR, than I would at the -50K balance on a tracker.
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A rough calculation for someone coming off of a fixed rate in 2011 with 27 years remaining and a 300K balance gives us the following for the last 9 years:

Tracker at 1.5% = total repayments of 121K and a balance of 213K today.

An average variable rate at 3.5% = total repayments of 154K and a balance of 229K today.

Therefore before this redress you'd be better off on the tracker by a total of 49K. [*edit]

The redress is 12% of the 300K plus interest giving us 36K + approximately 12K for a total of 48K.

So a similar redress up to this point? I think your calculations above include monthly overpayments?

Now going forward the difference in rates will start to kick in again but wouldn't the reduced repayments due to the capital reduction negate this to some extent?
 
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Brendan Burgess said:
Don't waste your time with the Ombudsman. He has already ruled on this. You are wasting your time, and his time which could be better used on other cases.

Brendan
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Do you think I should go straight to the high court route? I would have thought it would would be better to have exhausted all avenues (even if the outcome is unlikely to be favourable) before going to the high court. I am not familiar with the specifics of the case you brought previously, but mine might be slightly different in that I had a split mortgage, i.e. one portion of the mortgage was, and still is on ECB + 0.75% while the other was portion was fixed. Therefore, I was thinking it would be worthwhile to at least try to make my case with him. Obviously, due to your experience, you have far better insights with regards the ombudsman than me, so certainly appreciate your input.

@Megafan, I was just using the 1.5% as the example supplied by blue-steel. For me, my tracker was ECB + 0.75% (and the tracker portion of my mortgage is still on ECB + 0.75%). The fixed portion had the same wording as everybody else regarding "prevailing rate".
 
blue_steel said:
Tracker at 1.5% = total repayments of 121K and a balance of 213K today.

An average variable rate at 3.5% = total repayments of 154K and a balance of 229K today.

Therefore before this redress you'd be better off on the tracker by a total of 51K.
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But you are forgetting that the tracker example should still include the repayments of 154K (because I, and everybody else were forced to make those "over-payments"). Thus, you would have been charged even less interest, as those over-payments are reducing the capital, and have an even smaller balance.
 
Hey man

You have a choice - The Ombudsman or the High Court.

If you go to the Ombudsman and lose, you can't have a second bite at the cherry and go to the High Court.

So the Ombudsman is going to rule against you. So your only choice is to go to the High Court.

Brendan
 
Hi All
firstly, Brendan Thank you very much for getting this to this point.it is greatly appreciated.

we sent our figures out this year to an actuary. Not getting the tracker applied leaves us in a position of it costing us another near 100k in interest over the remaining lifeTime of the Mortgage. The 12% reduction and apx 4% compensation for us has been calculated as well short of what we would be due. We will not be stopping here and are in the process of discussing what further way we are going to take this but take it further is what is going to happen.
AIB have been a total nightmare to deal with over the last ten years. I could not begin to say how difficult it has been in trying to deal with them.
best of luck to everyone who has had a good outcome .
 
Brendan Burgess said:
You have a choice - The Ombudsman or the High Court.

If you go to the Ombudsman and lose, you can't have a second bite at the cherry and go to the High Court.

So the Ombudsman is going to rule against you. So your only choice is to go to the High Court.
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OK, now I'm very confused! And is why I probably do need to take the time while waiting for the letter to decide on the course of action. My understanding was that the escalation path was AIB -> Appeals Panel/BDO -> Ombudsman -> High Court. (with the option of skipping and going straight to the High Court)

From looking at the ombudsman's website, he is also suggesting this: https://www.fspo.ie/our-services/

Or am I getting this wrong, and when you are talking about the High Court, you are referring to a different "action" to simply "appealing the decision"?
 
No, you are reading it wrong.

You have a choice of the Ombudsman or the High Court.

If you believe that the Ombudsman's decision was massively wrong on a legal or reasoning basis, you can go to the High Court to have it quashed. On very rare occasions, the High Court will do that, and tell the Ombudsman to hear the case again.

But the High Court will not hear an appeal in the same way that it might hear an appeal from the Circuit Court.

Brendan
 
What is an absolute travesty is the failure of the Ombudsman, the Central bank and the Minister for Finance to continue to deny these Customers their right to a tracker rate mortgage. There is nothing to stop this bank increasing its rates over the next 10 years and recouping all this money. Its standard variable rate is still over 3%, people seem to forget they completely changed their policy with respect to the SVR, which was originally advertised as generally tracking the ECB rate changes, in the financial crash AIB rose this rate to 5.5% at one stage!

AIB should be in fear that it would loose its banking licence in this Country and the Minister should walk for reappointing the working directors.

People should be hopping mad over this!
 
I know in the cohort we are getting 12% back of our capital and then an interest repayment on this amount of capital, but correct me if I'm wrong, we are not getting any compensation?

I thought with all redress programs people got a percentage of the overcharging back as compensation, don't quote me but I think this was between 10 and 15%.

Can anyone clarify?
 
As far as I know they’re literally giving back what they owe and nothing more. It’s disgraceful in my opinion!
 
I am not sure they are even doing that Stephen, what they are doing is applying the FSPO remediation, unique to one particular case, across the board, and hoping it sticks.... Laughable really!
 
We just don't know what AIB is planning.

The payment to Karen was based on her situation. She was not in arrears. She did not suffer any particularly big stress.

But if someone was pushed into arrears by this or if someone made huge sacrifices to stay out of arrears, they can make a complaint to AIB for compensation and if AIB refuses, they can make a complaint to the Ombudsman.

If AIB had any sense, they would set up a special team to handle compensation claims quickly and generously rather than go through the time and expense of the Ombudsman. But they don't have any sense, so I don't expect them to do that.

Brendan
 
You can just fix for 10 years with AIB at 3.3 % if you want to guarantee against rate increases for the next decade
 
If AIB are going through each customer file to determine the level of refund, as that is what they're stating they are doing, they need to be ready to compensate who went through the MARP process, reduced payments, arrears and house repossession etc. I'm really disappointed with the way they are handling this. It's the biggest restitution project the bank have had, but they still they can't get it right. I also don't understand why they're issuing cheques during a pandemic. My mortgage comes out of my current account and they're both with AIB so I don't understand why they couldn't refund my current account and not issue me a cheque whereby I have to go into a branch in my local town to lodge it.
 
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