KBC KBC basing cohorts on Application date rather than Draw-down dates

[gnf_ireland]

Thanks for your insight. Looks like a uphill battle on our side.

I think you need to get your timeline worked out, and also work out your 'personal story' and see how much of it you can prove via whatever means possible.
The least amount of 'gaps/holes' you have in the story, the easier it will be to defend it. KBC will clearly fight each and every one of these cases, so its likely you will have to prove you were influenced by the flyer. This is easier said than done, especially a decade after the fact

Putting yourself in their shoes, or having someone else play devil's advocate, may help you put up the best possible defence possible. If you need someone to play this role, I am sure you will find some willing participants here on AAM

Don't give up hope, but you need to make the story stick. For everyone legitimately influenced by the flyer, there is probably 10 using it in an opportunistic manner at this stage. You need to show you are part of the 1 legitimately influenced.

 

[grock1982]

Thanks again, I need to go through all the paperwork and correspondence and dig out the proof required.

 

[Sanparom]

The flyer was issued to brokers stating that any customer who rolls off a fixed rate would automatically move to a tracker rate.
The reason it applies to KBC mortgages and not other banks is because it was a KBC communication
The reason it applies to broker applications and not direct applications is because it was issued to brokers only
The reason the dates apply as those are the dates which KBC state the flyer was active

The agrument made is people who discussed their mortgage applications with their brokers were influenced to go with KBC and fix based on the belief that they would move to a tracker rate when their fixed rate expired. When someone applies for a mortgage via a broker they normally have a choice of a number of banks and therefore this was the factor that made them choose KBC.

There is nothing in their homeloan agreement to say they would default onto a tracker mortgage when the fixed rate expired, hence the reliance on the flyer !

Customers around the dates impacted now have to show their decision was influenced by the existing of the flyer ! So someone who drew down in October 2006 does not have any case in relation to the flyer for example.

Thanks for your reply. I understand all of that, but my question is really about why other banks are offering redress and compensation? On what terms? What are the cohorts? KBC seem to only be offering it based on the flyer, no other reason. What if you applied outside of the flyer dates, but your contract said you'd go on to tracker at end of fixed rate period. Mine said that at the end of the fixed rate period the prevailing variable rate would apply (I know they're not admitting this was the tracker, but based on a lot I've read, I believe that it was). I'm currently in dispute with KBC about this, but I'd like to be armed with as much information as possible to fight them on this.

KBC had the flyer, but surely that's not the ONLY reason why people would be impacted!

 

[Brendan Burgess]

KBC had the flyer, but surely that's not the ONLY reason why people would be impacted!

What does your contract say?

It is likely that it says "Fixed rate rolling onto SVR"

Despite that, the Central Bank has persuaded KBC to give trackers to people because a flyer had been sent to brokers saying that that those who fixed would roll onto trackers.

No one appears to have been asked if they checked their contract.
No one appears to have asked KBC to correct their contract to point out that they should be rolling onto trackers.
No one got an email from KBC or their broker pointing out that they would be rolling onto trackers.

Brendan

 

[gnf_ireland]

. I understand all of that, but my question is really about why other banks are offering redress and compensation? On what terms? What are the cohorts? KBC seem to only be offering it based on the flyer, no other reason.

The simple answer here is there is no simple answer. You will need to trawl through the various discussions on it to find out the various tranches effected by each bank - and they are all different. You can normally find the numbers effected as well by each traunch.

For example, some customers had "for the lifetime of their mortgage" stated in their home loan agreement
Others were forced off their trackers when they had to restructure or go interest only for a period of time
Some BOI staff members were issued an internal memo
Some where issued letters which the banks now claim are in error
Lots of different reasons - only 625 (I think) are impacted by the KBC flyer reason.

What if you applied outside of the flyer dates, but your contract said you'd go on to tracker at end of fixed rate period. Mine said that at the end of the fixed rate period the prevailing variable rate would apply (I know they're not admitting this was the tracker, but based on a lot I've read, I believe that it was). I'm currently in dispute with KBC about this, but I'd like to be armed with as much information as possible to fight them on this.

If your contract clearly stated you were entitled to a tracker at the end of the fixed period, or you were entitled to a tracker mortgage for the lifetime of the homeloan, then this is a very valid reason to be included. I would be amazed if anyone with that text is not included at this stage, given the large push from the central bank

end of the fixed rate period the prevailing variable rate would apply

There are large discussions within sets of customers within certain banks around what the prevailing variable rate, but most of these that apply relate to banks which did not have a variable rate at the time and were selling trackers only. There is a case (however light) that they had reason to believe that the prevailing variable rate was a tracker as the bank offered no other variable based mortgage at the time.
For a bank which offered both variable rate mortgages and tracker mortgages, you may have difficulty in convincing KBC or the FSO that you understood that "prevailing variable rate" meant tracker rate, and it was their fault that is what you understood it to be. However, if you have correspondence to this effect with KBC it may change the balance in your favour

Simple short answer to your question is - lots of reasons people are impacted, different between each of the banks and you cannot assume what applies to one bank applies to another. Suggest you go through all the KBC related threads to see if there is anything that resonates with you personally. Good luck

 

[gnf_ireland]

Despite that, the Central Bank has persuaded KBC to give trackers to people because a flyer had been sent to brokers saying that that those who fixed would roll onto trackers.

>>No one appears to have been asked if they checked their contract.
>>No one appears to have asked KBC to correct their contract to point out that they should be rolling onto trackers.
>>No one got an email from KBC or their broker pointing out that they would be rolling onto trackers.

In defence here, the KBC flyer is published marketing material from the bank and is pretty clear in its wording. It is reasonable to expect it was true and accurate, and its reasonable to suggest that it influenced some customers decision - or at least some brokers decision when advising customers. Maybe not all, but definitely some

Regarding the checking the contract, correcting the contract and email from KBC/Broker, I had a separate issue with KBC a few years ago that went into dispute. I had sent KBC an email asking a specific question and they had not answered it. I had also checked the wording of the contract and other material around it and was happy with it. I have experience reading contracts so they are not alien to me and I had just been 'burned' by BOI in terms of moving from a SVR rate to LTV rate....... and I still got caught and had to go through a dispute process to try resolve it!
What I am trying to say is even if people were being careful, they can still get caught.
Most people don't understand mortgages - they just want to buy a house ! I would love to know the age profile of the customers impacted by the whole tracker issue - I am guessing its in the late 20's by enlarge given the timelines involved.

 

[unfortunate]

Sanparom's contract says " that at the end of the fixed rate period the prevailing variable rate would apply ". Same as mine. Not rolling to SVR. If they are the same rate why was SVR not used in contracts??

 

[Darn40]

The simple answer here is there is no simple answer. You will need to trawl through the various discussions on it to find out the various tranches effected by each bank - and they are all different. You can normally find the numbers effected as well by each traunch.

For example, some customers had "for the lifetime of their mortgage" stated in their home loan agreement
Others were forced off their trackers when they had to restructure or go interest only for a period of time
Some BOI staff members were issued an internal memo
Some where issued letters which the banks now claim are in error
Lots of different reasons - only 625 (I think) are impacted by the KBC flyer reason.



If your contract clearly stated you were entitled to a tracker at the end of the fixed period, or you were entitled to a tracker mortgage for the lifetime of the homeloan, then this is a very valid reason to be included. I would be amazed if anyone with that text is not included at this stage, given the large push from the central bank


There are large discussions within sets of customers within certain banks around what the prevailing variable rate, but most of these that apply relate to banks which did not have a variable rate at the time and were selling trackers only. There is a case (however light) that they had reason to believe that the prevailing variable rate was a tracker as the bank offered no other variable based mortgage at the time.
For a bank which offered both variable rate mortgages and tracker mortgages, you may have difficulty in convincing KBC or the FSO that you understood that "prevailing variable rate" meant tracker rate, and it was their fault that is what you understood it to be. However, if you have correspondence to this effect with KBC it may change the balance in your favour

Simple short answer to your question is - lots of reasons people are impacted, different between each of the banks and you cannot assume what applies to one bank applies to another. Suggest you go through all the KBC related threads to see if there is anything that resonates with you personally. Good luck

I drew down in March 2006 on a fixed rate for 3 years at expiry of the fixed rate the lenders prevailing variable rate will apply nowhere in the contract does it explain what the lenders prevailing variable rate is it does not mention svr anywhere either i though they would at least have to explain the rate in the contract tracker mortgage we’re all the go at this time and were also variable they can hardly just say the prevailing variable rate is svr now they have to prove it was

 

[Daisy duke]

I drew down in March 2006 on a fixed rate for 3 years at expiry of the fixed rate the lenders prevailing variable rate will apply nowhere in the contract does it explain what the lenders prevailing variable rate is it does not mention svr anywhere either i though they would at least have to explain the rate in the contract tracker mortgage we’re all the go at this time and were also variable they can hardly just say the prevailing variable rate is svr now they have to prove it was

Yes but the CB seem to have let the banks off the hook on this, now all the onus is on the consumer to prove what it meant. It’s a joke!

 

[gnf_ireland]

Sanparom's contract says " that at the end of the fixed rate period the prevailing variable rate would apply ". Same as mine. Not rolling to SVR. If they are the same rate why was SVR not used in contracts??

The prevailing variable rate between 2010-2014 was SVR, as banks were offering no other alternatives
In late 2014/early 2015, LTV became a factor, and most of the banks now do use SVR for new customers, but have a LTV variable rate as their prevailing variable rate

The question is relatively straight forward - if the bank had multiple variable rates in operation when the mortgage was taken out, or the customer fixed their mortgage, and the terms of the loan agreement said the prevailing variable rate - then it is probably ambiguous. However, I still think you will struggle to convince KBC that prevailing variable meant tracker, if they had other variable rates available.

Please remember its KBC, CB or FSO you need to prove your position to - not me !

 

[gnf_ireland]

I drew down in March 2006 on a fixed rate for 3 years at expiry of the fixed rate the lenders prevailing variable rate will apply nowhere in the contract does it explain what the lenders prevailing variable rate is it does not mention svr anywhere either i though they would at least have to explain the rate in the contract tracker mortgage we’re all the go at this time and were also variable they can hardly just say the prevailing variable rate is svr now they have to prove it was

So I am assuming that you also had the prevailing variable rate term used as well.
So what terms are defined?
The reason I ask is my contract defines fixed rate, variable rate and tracker rate but does not define what I am on which is a LTV rate. I had the same issue with KBC to explain why LTV rate was not explained and I was told I should know what it meant.
If they explain variable rate, tracker rate and fixed rate in the mortgage contract material, it is a fair jump to say that prevailing variable rate is not a variable rate which can be adjusted up and down by the bank and does not align to ECB.

But you need to take the words in context of the mortgage agreement rather than 3 words in isolation....

 

[Darn40]

Sanparom's contract says " that at the end of the fixed rate period the prevailing variable rate would apply ". Same as mine. Not rolling to SVR. If they are the same rate why was SVR not used in contracts??

My contract is also same as this I thought if contract was ambiguous
They had to go in favour of us ??

 

[gnf_ireland]

Yes but the CB seem to have let the banks off the hook on this, now all the onus is on the consumer to prove what it meant. It’s a joke!

Taking a step back here and I fully accept I am not impacted so I have no emotion on the topic at all
"Prevailing variable rate" to me means the variable rate that applies when the fixed term ends - so the current variable rate on offer by the bank at that point in time. Its not a fixed rate and not a tracker rate.
If it was a tracker rate, then I would expect the word tracker to be listed somewhere or at least ECB +x%
If it was the rate that existed when the fixed term started, this is a known quantity so can be listed in the loan agreement

Personally, I think its a hard sell to say that the term "prevailing variable rate" means the rate that existed when the fixed period commenced, given it related to what happened when it ended.

I am not sure what you want the CB to do - declare what "prevailing variable rate" means ? Chances are they would go with the explanation above and close the door for you all. At least this way you have a chance to argue your case.

BTW I have said this on another tread a while back on this topic
if you can find someone who fixed for 1 year in March 2006, so trackers still existing when the fixed term matured, what rate did they automatically default onto? This may assist your argument depending on the outcome ! Its worth a try !

 

[gnf_ireland]

My contract is also same as this I thought if contract was ambiguous
They had to go in favour of us ??

I am not convinced that is the case - their may be a principle depending on certain criteria that they need to go in favour of the customer, but if you look at the numbers being rejected, I doubt you can say everything is in favour of the customer


If you came into a shop and wanted to buy something, and I said come back in a week and I will sell it to you at the prevailing price, would you expect that to be the price today or the price in a weeks time? be fully open and honest here?
I don't think the banks will see "prevailing variable rate" as ambiguous - maybe if it said "prevailing interest rate" but it is clear its variable!

 

[Darn40]

I am not convinced that is the case - their may be a principle depending on certain criteria that they need to go in favour of the customer, but if you look at the numbers being rejected, I doubt you can say everything is in favour of the customer


If you came into a shop and wanted to buy something, and I said come back in a week and I will sell it to you at the prevailing price, would you expect that to be the price today or the price in a weeks time? be fully open and honest here?
I don't think the banks will see "prevailing variable rate" as ambiguous - maybe if it said "prevailing interest rate" but it is clear its variable!

My take on prevailing variable rate is rate at draw down not expiry
But I could be wrong

 

[gnf_ireland]

Honestly, I hope you all can get it to work out, but I do think you are in for a hard time convincing either KBC, CB or FSO on this one.

 

[Daisy duke]

Taking a step back here and I fully accept I am not impacted so I have no emotion on the topic at all
"Prevailing variable rate" to me means the variable rate that applies when the fixed term ends - so the current variable rate on offer by the bank at that point in time. Its not a fixed rate and not a tracker rate.
If it was a tracker rate, then I would expect the word tracker to be listed somewhere or at least ECB +x%
If it was the rate that existed when the fixed term started, this is a known quantity so can be listed in the loan agreement

Personally, I think its a hard sell to say that the term "prevailing variable rate" means the rate that existed when the fixed period commenced, given it related to what happened when it ended.

I am not sure what you want the CB to do - declare what "prevailing variable rate" means ? Chances are they would go with the explanation above and close the door for you all. At least this way you have a chance to argue your case.

BTW I have said this on another tread a while back on this topic
if you can find someone who fixed for 1 year in March 2006, so trackers still existing when the fixed term matured, what rate did they automatically default onto? This may assist your argument depending on the outcome ! Its worth a try !

You have put up some great arguments all day, it is good to have a devils advocate in all this. When you are caught in the middle of this and because you signed a document 10 days early it it is difficult to just accept what you have potentially missed out on. Like you said earlier I wanted to buy a house, did I fully understand it all, no. Did I record every contact and communication with my broker, no. Did I rely on the banks, brokers, solicitors etc to do right by me, yes. I wish back then I knew what I know now. Expensive lessons learned for a lot of us I think.

 

[gnf_ireland]

You have put up some great arguments all day, it is good to have a devils advocate in all this. When you are caught in the middle of this and because you signed a document 10 days early it it is difficult to just accept what you have potentially missed out on. Like you said earlier I wanted to buy a house, did I fully understand it all, no. Did I record every contact and communication with my broker, no. Did I rely on the banks, brokers, solicitors etc to do right by me, yes. I wish back then I knew what I know now. Expensive lessons learned for a lot of us I think.

Absolutely 100% on all of that and I am genuinely not trying to rain on anyone's parade here. I am just trying to make sure people understand that at this stage its getting down and dirty in the trenches and making sure everyone's ducks are in a row.

I had a complaint with KBC on mortgages in the past, and been through the process with them - albeit much smaller sums of money involved. It is tough to make progress and I honestly believed my case was pretty straight forward. Saying they would not budge an inch for most of the duration was an understatement. They just kept answering questions I had not asked them and not answering the questions I did ask them.

The only line I would pick out for attention from above is "Did I rely on the banks, brokers, solicitors etc to do right by me, yes."
Whatever about the brokers and solicitors acting on your behalf, the banks are a different matter. They were never working on your behalf. You ultimately paid the brokers and solicitors so they have a duty to ensure they are doing right by you ! This was no difference to expecting the estate agent to be working on your behalf either !

Expensive lessons learned for a lot of us I think.

My last comment on this is the whole tracker thing has become expensive only with hindsight. No one could have expected in 2006 that interest rates would stay as low as they have for as long as they have, and that the banks would need to charge variable rates of 4.5%+ to stay afloat. If ECB was around 2% or the variable rate was around 2.5%, it would not have been as bad. But people got hit from both sides, and that is what makes this such an important issue to get resolved.

 

[joe351980]

[QUOTE="
If you came into a shop and wanted to buy something, and I said come back in a week and I will sell it to you at the prevailing price, would you expect that to be the price today or the price in a weeks time? be fully open and honest here?
I don't think the banks will see "prevailing variable rate" as ambiguous - maybe if it said "prevailing interest rate" but it is clear its variable![/QUOTE]

I think this is a very valid point. But let's say you HP a car and sales man tells you come back in a week and I'll give you prevailing rate. You go back and realise he has x number of customers at rate y, but says he's putting you on rate z. Now you're after agreeing to buy the car and all. You would presume that prevailing was going to be a favourable rate, not that he could charge you what he liked. And greater than some of his other existing customers.

 

[gnf_ireland]

I genuinely think the chances of KBC accepting the "prevailing variable rate" to mean a tracker rate applicable on the date the draw down occurred or the fixed period commenced is unlikely without being forced to do so by either the CB, FSO or courts.

If you genuinely feel this is an issue, have a chat with P Kissane as a starting point. He will be able to provide some sort of steer to you. After that, its the KBC complaints process, followed by FSO and see from there where you end up.

Its likely to be a long drawn out [potentially legal] battle, so would be interested to get an independent solicitor's view of the wording of the full section. Chances are it will end up being the legal interpretation that is used.

Obviously, if the documentation uses the words tracker of x% above ECB, then this is a different story. I am talking purely on the use of the term "prevailing interest rate".