AIB If you are not happy with the AIB redress

Brendan Burgess

Brendan Burgess

Founder
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Updated 20th June 2021

There are two main grounds for complaint

1) The Interest on the write down was calculated using simple interest. They should have used compound interest.

Template for complaining to AIB over compound interest issue

I would encourage everyone to complain to AIB and then to the Ombudsman about AIB's calculation of the interest on the write down. The calculated it on a simple interest basis. There is no need to go into detail as they will reject it anyway. You must complain to AIB and get a Final Response...
www.askaboutmoney.com


2) You want compensation for the inconvenience and loss caused.

The Ombudsman awarded no compensation in Karen's case because she had suffered no inconvenience.

But if you can show that you did suffer financial loss or inconvenience, then you should first complain to AIB. If you are not satisfied with their offer, you can make a complaint to the Ombudsman or go down the legal route.

Examples where you would have a valid claim for such compensation:
  1. Being in arrears which you would not otherwise have been in
  2. Being subject to legal action which would not have been necessary if you had been on a tracker
  3. Although you were not in arrears, you made huge sacrifices to stay out of arrears and really suffered financially.
  4. Losing ownership of your house either voluntarily or by court order
Jim Stafford has an excellent post here on the topic for losses arising from trackers generally.

Key Post - Issues to consider if appealing Compensation for Tracker Mortgage

We now know that more than 13,000 bank customers were incorrectly charged a wrong rate of interest on their loans by the various banks. The Central bank recently reported that it had found “material deficiencies in certain lenders’ responses” which had required “robust and sustained” Central...
www.askaboutmoney.com
 
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First complain to AIB

This is always the first stage whether you got to the Ombudsman or the High Court.

If you are looking for compensation, and your claim is reasonable, it's quite likely that the bank will make you an offer.

If you are not happy with how they propose to resolve your complaint...

Ombudsman or court?

You must choose one or the other. If you don't like the Ombudsman's decision, tough. There is an option to appeal it to the High Court, but only in very limited circumstances and the court rarely overturns the Ombudsman's decision. They defer to the Ombudsman's expertise and judgement.


If you want to be put on a tracker...

You will have to go down the court route. You can complain to the Ombudsman but as he has already decided this issue, it's very unlikely that you will be able to persuade him to change his mind.

If you have some document from AIB such as an email from a manager saying you would get a tracker when the fixed rate ended, then you would have a better chance with the Ombudsman. However, if you have such a document, it's likely that AIB would give you the tracker.

If you mainly want compensation...

For example, if you have lost your home or traded up, getting a tracker won't be of much value to you.

The advantages of the Ombudsman:
  1. It will be far quicker than the court
  2. It might actually be resolved by mediation
  3. It will cost you nothing
  4. There is no risk of having costs awarded against you if you lose
  5. You will be able to handle it directly. If you go to court you will be relying on solicitors and barristers who might not regard you as a priority.
  6. It is confidential - you will not have to attend an open court
  7. Under the Act, the Ombudsman , "shall act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without undue regard to technicality or legal form."
The advantages of the Court
  1. AIB might not want the publicity of a court case and might settle
  2. If you have a very weak case, you probably have a better chance of a fluke judgement from a judge in the Circuit Court than you have from the Ombudsman
  3. You can ask for a tracker at the same time
 
The 300 Cohort

The 300 Cohort will be getting trackers at 1.5% on average and will be getting redress based on this. They will also be getting 15% of the overcharge in compensation.

If they are not happy with the compensation, they will be able to to through the Appeals Process and then the Ombudsman.

So they have no reason to get involved in court action.
 
The already traded up or mortgage paid off cohort

This cohort does not include those who have switched mortgages

If you have already traded up or otherwise paid off your mortgage, there is very little to be gained by going to court. If they say you should have been put on a tracker of 1.5%, your potential gain is very little. The difference between the redress based on a 1.5% tracker and the Ombudsman's scheme is very little.

So your main complaint might be for compensation for distress and inconvenience and so the Ombudsman is the better route for you.
 
The loss of ownership cohort

If AIB pressurised you into selling your home or if they got an order for possession...

Again, complain to AIB first. They might reach a deal e.g. writing off any shortfall you owe them.

In my experience, most people lost their home because they were paying little or nothing. It would not have mattered if they had been on 0% interest rate.

Most of these claims would fail in the court or with the Ombudsman because you will not be able to show that the loss was caused by the failure to be offered a tracker.

So if AIB does not do a deal with you, complain to the Ombudsman as it will be quicker and cheaper.

If you had a €2m house and the stakes are a lot bigger, you might consider the court route.
 
The Additional Compensation cohort

  1. Being in arrears which you would not otherwise have been in
  2. Being subject to legal action which would not have been necessary if you had been on a tracker
  3. Although you were not in arrears, you made huge sacrifices to stay out of arrears and really suffered financially.
Even if you are still in your home and want a tracker, I think you should forget about the tracker and go to the Ombudsman.

If you have a good case for compensation, the Ombudsman will award it to you.

You can go to court, but you will have to make the whole case from scratch:

1) You will have to prove that AIB broke their contract
2) You will have to prove that you suffered a loss as a result of this breach of contract. AIB will deny this arguing that the tracker margin would have been much higher than the SVR
3) You will have to prove that the tracker margin would have been 1.5%
4) You will then have to make your case for compensation.

With the Ombudsman, Steps 1) 2) and 3) have already been made so the Ombudsman will only have to look at Step 4).
 
The We Want Trackers and Basic Compensation Cohort

This is the majority cohort where I think a court action should be taken.

You still have your mortgage with AIB or you have switched your mortgage without changing homes.

If you win your court case, you will get
  1. Redress based on the 1.5% tracker from the date you came off the fixed rate. This could be up to 20% more
  2. A tracker for the remaining term of your mortgage
  3. Some basic compensation for being overcharged.
There is no facility for a class action in Irish courts, so each person would have to take their case individually.

However, it would be a good idea for those of you who want to go down this avenue, to get together and use the same solicitor and barrister.

The case will be heard from the beginning and the Ombudsman's decision will have no relevance.

You will have to prove
1) That there was a breach of contract
2) That there was a prevailing rate and it was 1.5% or lower
3) That you would have availed of it

I think that the chances of winning are good but it would be a very hard fought battle.

I will open up a separate thread for this cohort to discuss it in more detail.

Brendan
 
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Brendan Burgess said:
The Additional Compensation cohort

  1. Being in arrears which you would not otherwise have been in
  2. Being subject to legal action which would not have been necessary if you had been on a tracker
  3. Although you were not in arrears, you made huge sacrifices to stay out of arrears and really suffered financially.
Even if you are still in your home and want a tracker, I think you should forget about the tracker and go to the Ombudsman.

If you have a good case for compensation, the Ombudsman will award it to you.

You can go to court, but you will have to make the whole case from scratch:

1) You will have to prove that AIB broke their contract
2) You will have to prove that you suffered a loss as a result of this breach of contract. AIB will deny this arguing that the tracker margin would have been much higher than the SVR
3) You will have to prove that the tracker margin would have been 1.5%
4) You will then have to make your case for compensation.

With the Ombudsman, Steps 1) 2) and 3) have already been made so the Ombudsman will only have to look at Step 4).
Click to expand...

Regarding this, i think i would have a case for item 1 and 3. We did get in arrears at some point. Our personal circumstances changed and it was very difficult to keep up the payments, specially with at 4% interest rate. If they were at 1.5% I'm certain the repayment wouldn't have been so high and therefore affordable. We were in arrears, trying to keep the payments but It reached a point we asked the bank some kind of help or break in 2015. And they offered us the split mortgage to be able to have an affordable repayment. Althought it helped us up to today. I still have a lump sum to pay in 25 years. I think, if we were at the tracker rate, it wouldn't have been necessary. Because, i believe, without doing the maths, the repayment would be very close to what we got with the split.
Would you agree with me that we may qualify for some compensation?
 
How can you prove you were under huge financial stress when you didn’t go into arrears? We managed to keep up our repayments but only because my husband is a taxi driver and literally worked every hour he could! We were under massive stress for years but have no paperwork to back this up so it’ll just be our word against theirs :(
 
Stacey Mckeogh said:
How can you prove you were under huge financial stress when you didn’t go into arrears? We managed to keep up our repayments but only because my husband is a taxi driver and literally worked every hour he could! We were under massive stress for years but have no paperwork to back this up so it’ll just be our word against theirs :(
Click to expand...

Well your husband's earnings will be set out in his p60 or accounts, which should show that he needed to work more relative to the previous years?
 
I suppose. Don’t feel that that would work at that won’t include hours he worked etc, just income, which was obviously enough (alongside mine) to pay our bills (as we didn’t go into arrears) so I’m sure they’ll just dismiss it. :(
We asked for a moritorium (Is that the right word) of a 3 months in 2010 but were denied that. We also asked for a tracker mortgage in 2010 but were denied that also....hopefully that would all go a little way to prove we needed help and weren’t given it?
 
ladybirdy2020 said:
I wonder if people that got the split mortgage should be entitled to a compensation. Because they were only offered it in the first place because we were in financial distress due to high mortgage repayments. It is my understanding that my credit rating has been downgraded since.
Click to expand...

AIB - If you have a split mortgage and you are in the AIB Prevailing Rate cohort...

You should give serious consideration to paying the interest refund against the warehouse. AIB is setting part of the write down against the warehouse - e.g. €10,000 If the split mortgage is less than 5 years old, AIB pays a 42% bonus on any money paid off the warehouse. So they are then...
www.askaboutmoney.com
 
It was very generic so I guess I will take it as a starting point. My argument is that their original defense no longer applies since they have paid me compensation so I would like the situation to be reassessed before taking it further.
 
Hi all, I have received my letter of offer today which only includes €600 in interest as the mortgage ended not long after coming of the fixed in 2012. This was because the house was sold due to separation which was Caused in part by financial pressures etc of a large mortgage, with an infant at the time.

should I be looking for compensation in respect of this? I know the sample case had no real implications caused by the tracker

where would I start.
Thanks
 
Jojojo123 said:
This was because the house was sold due to separation which was Caused in part by financial pressures etc of a large mortgage, with an infant at the time.
Click to expand...

Hi jojo

The calculation of the interest seems correct. You terminated the mortgage so it finished.

You are very, very, lucky. If the Ombudsman had ruled that you should have got a tracker, you would have got very little compensation.

I think you would have a very hard job proving that the separation was due to your not having a tracker.

Brendan
 
Brendan Burgess said:
Hi jojo

The calculation of the interest seems correct. You terminated the mortgage so it finished.

You are very, very, lucky. If the Ombudsman had ruled that you should have got a tracker, you would have got very little compensation.

I think you would have a very hard job proving that the separation was due to your not having a tracker.

Brendan
Click to expand...
Thanks Brendan,
I appreciate your input!
I suppose I was just hopeful, but in any case, it’s all good news!
 
Hi Brendan,

Thank you so much for your work on this, like so many others here, we were oblivious to this.

We received our cheque for the 12% plus interest. Interest amount to the day we redeemed mortgage in 2015.
we had to sell our previous property in 2015 in negative equity to enable us to take out a self build mortgage. It was a condition of our loan offer with a different bank. Having the two mortgages together at the time would not have been manageable on the rate we were on. We know now that if we had the tracker rate on our old property we would have been able to keep our older property as an investment property or at least until it gained back some equity. We lost €50k in negative equity which we had to discharge before taking the new mortgage.
Is there anything we can do to address this, can we take this to the Ombudsman, do you think we have a valid claim for additional compensation

Thank you once again.
 
Hi, has anybody lodged a complaint to AIB following receipt of writedown cheque/balance reduction and interest refund?
 
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