AIB How is AIB calculating the interest on the 12%?

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blue_steel

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Got the cheque this morning. It came out 2 grand less than the calculator. Maybe I made a mistake on the calculator. Fixed rate ended 02.08.2011 with a balance of 340K. Write down was 40800 as predicted. On SVR since. I had worked out 15382 interest refund. Have received 13259. If someone wants to double check the figures? Maybe the error was mine.
 
blue_steel said:
Got the cheque this morning. It came out 2 grand less than the calculator. Maybe I made a mistake on the calculator. Fixed rate ended 02.08.2011 with a balance of 340K. Write down was 40800 as predicted. On SVR since. I had worked out 15382 interest refund. Have received 13259. If someone wants to double check the figures? Maybe the error was mine.
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OK, I checked it and got the same figure as you did.

Check the date that they used for when you broke out.

Call the helpline and ask for a copy of their calculation.

Brendan
 
Hi, I received 2 cheques this morning from AIB. By my rough calculation they have paid me the flat interest on the interest overcharge but haven't compounded it. To me that's strange as then I am out of pocket on the compounded interest. Also they haven't given any calculations.

Overall, between two loan write offs and interest refunds I have received approx 150k for something I didn't know anything about until recently and have never actively pursued. So thanks to Brendan and anyone else who has pushed this whole agenda. This has been a massive and much needed gift to my family.
 
blue_steel said:
Thanks Brendan. Dates and figures all tally on the letter. Will follow it up.
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I don't know if this would affect it but the calculations in the calculator are on a daily basis but the T&Cs say it was calculated on a monthly basis, see attached. I got the same result in the calculator but the figure they sent is approx the 4% Brendan originally noted.
 

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Received cheque this morning also. Its short by approx. €1.4k. I called the helpline and explained my calcs as per the calculator. They are to lookinto it and will get back to me by end of day. The people on the helpline don't have access to the calculations of the payment amounts..will let you know what they come back with. Overall, still happy though with what I received but want to be sure it was calculated correctly
 
I spoke to AIB who have confirmed that they are not compounding the interest.

I didn't follow the explanation so they are going to email me the explanation.

Brendan
 
Just off the phone with the helpline...

They are calculating it as follows:

From the date fixed rate ended - interest as of that month (either beginning or end - whichever is higher) x no days in month / 365 x amount if 12% capital reduction. This is done monthly not daily.
 
Hi RP

That would make very little difference.

It's the compounding vs. simple which makes the big difference.

Brendan
 
Looked at this again and if simple interest is used, then it matches with the payments received...I had thought (as per the calculator) that they would use compound interest..will see what response AIB come back with later today..although I think we have the answer!
 
As a point of note which I didn’t take much notice of at the time when I rang the helpline during the week asking when will cheques be posted I somehow mentioned I have a good idea of what the amount will be. She quickly dismissed it and said people should wait and see what they get and see the breakdown explained in the accompanying letter or they might be disappointed by calculating themselves what to expect. She dismissed the 4% and again repeated I needed to wait and see
 
Same here the cheque arrived this and is short(on my calculations) I spoke to the helpline and they seemed to think they took the interest rate from the month we exited the fixed-rate and compounded that and the rate didn't change. The guy is going to call back with a full explanation when he gets it.
 
listening to all the posts here they seem to have used simple interest which in my opinion, is totally incorrect and will make a difference when using the calculator. If you want to check the interest calc that they have used you can just delete column E of the calculator, but they have charged compound interest so they should be using compound interest when paying back their customers but nothing surprises me with these guys anymore!
 
This is the extract from the Ombudsman's decision

b) repay the Complainant, to an account of her choosing, the difference between (1)
the amount of interest she actually paid from 30 April 2010 to date, and (2) the
amount of interest that she would have paid on the reduced (written down) capital
balance from 30 April 2010 to date.

I really can't see how that can be interpreted any differently.
 
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