KBC KBC told brokers" all fixed rate loans will roll onto trackers on expiry"

[Brendan Burgess]

However, that doesn't mean that borrowers ever had a contractual right to roll over to trackers or that KBC ever committed to keep this policy in place for any specific period.

Hi Sarenco

My friend complains that KBC told him that he would roll over onto a tracker when he fixed.

His problem is that the Ombudsman discounted that evidence.

His other problem is that the Fixed Rate Agreement did not say that.

But if the only problem was that the conflict of evidence on what KBC told him, then I think that the public policy espoused in that leaflet would help his case.

Brendan

 

[Sarenco]

Hi Brendan

To be honest, I think people are reading words into the flyer that simply aren't there.

But, who knows, perhaps the Central Bank will take a different view - stranger things have happened.

 

[todo]

Hi Sarenco

My friend complains that KBC told him that he would roll over onto a tracker when he fixed.

His problem is that the Ombudsman discounted that evidence.

His other problem is that the Fixed Rate Agreement did not say that.

But if the only problem was that the conflict of evidence on what KBC told him, then I think that the public policy espoused in that leaflet would help his case.

Brendan

I'd have to agree with Brendan on this, the flyer would have helped his friends case. If KBC's argument is that they never told him he would revert to a tracker but at the same time they were sending out flyers saying they would to brokers, then any reasonable FSO would have to consider that KBC is not being accurate in its account of what happened.

My question is when KBC review this case again as part of the central bank review, and I'm sure that they will find that they were right all along, does the consumer have the right to challenge the finding of the review via the FSO?

 

[Sarenco]

Except that the flyer doesn't actually say to brokers that a borrower that fixed in 2006 would be entitled to roll over to a tracker.

 

[Sophrosyne]

Doubtless someone, somewhere is examining the motive behind the issue of the flyer.

 

[Wardy7]

This attracted my interest on Friday when I read the Indo.
We took out a mortgage in Jan 07 with IIB and decided to fix for 3 years @ 5.45 . When that term was up in 2010, trackers were off the table and 'hard cheese' was what we thought..
I spent this morning reading our documents from 07, and it mentions reverting to prevailing interest rate at end of the fixed term. Is that relevant? And does the fact that we never had a tracker mean I've no business looking for one now?..even with of this flyer coming to light from November 06.

I didn't have a tracker to start with either......but I do now! I'm PTSB.

 

[DamC82]

I didn't have a tracker to start with either......but I do now! I'm PTSB.

Any particular reason why they granted it? Was it wording in the contract in your favour ?

 

[PJDCol]

I have a copy of signed document from 2006 by one of the leading mortgage brokers in Ireland. This document has details of the recommendation by the broker of who the client should go with, etc.....which obviously in this case it was IIB.

Included in the recommendation is the line "should you decide to choose a fixed rate at the start of your mortgage, you will have the choice of another fixed tae when this expires or you can choose variable or tracker"

These people did fix at the start of their mortgage but were never offered a tracker mortgage at the end of the fixed rate as again it was not in the Fixed Rate document.

I understand this is only a document from a broker but it again backs up the story of what their policy was!

 

[Sarenco]

I understand this is only a document from a broker but it again backs up the story of what their policy was!

Is there any doubt what KBC's policy was in 2006?

However policies can change. On the other hand, a contract can't change without the agreement of all parties to that contract.

 

[PJDCol]

Well yes of course policies can change but can a bank or any company advertise a "product" and then the legal documentation representing that not have the options as advertised?

I signed with my broker between a two periods where I have seen these advertised.

Surely that breaks all sorts of code of practice.

 

[Sarenco]

Well yes of course policies can change but can a bank or any company advertise a "product" and then the legal documentation representing that not have the options as advertised?

Of course not but I have yet to see any advertisement from 2006-08 where KBC guaranteed, or even committed, to offer a borrower a tracker rate on expiry of their fixed-rate term.

If you do have copies of any such advertisements I would be very interested in seeing them.

 

[peemac]

Of course not but I have yet to see any advertisement from 2006-08 where KBC guaranteed, or even committed, to offer a borrower a tracker rate on expiry of their fixed-rate term.

If you do have copies of any such advertisements I would be very interested in seeing them.

They did advertise "3 year capped trackers" (i have the advert and press release) and under the code of conduct "all avaliable rates must be offered" The capped tracker was not given as an option.

 

[Sarenco]

Ah, sorry, I thought you were saying that KBC advertised fixed-rate mortgages on the basis that borrowers could opt to roll over to a particular rate on expiry of their fixed-rate term. That is really the subject of this thread.

 

[peemac]

Ah, sorry, I thought you were saying that KBC advertised fixed-rate mortgages on the basis that borrowers could opt to roll over to a particular rate on expiry of their fixed-rate term. That is really the subject of this thread.

KBC advertised many things - but not one advert or PR article from 2004 - 2007 advertised or mentioned "Standard Variable Rate" - hence people at the time would not be expected to understand that company's standard variable rate was a very specific rate as no glossary of terms gave any information about what "compnay's standard variable rate". It wasn't just IIB - no bank advert I saw in Irish Times or Independent in 2005 & 2006 mentioned a standard variable rate, so the phrase was simply not in use in relation to the general public

In terms of advertising - a flyer to brokers constitutes advertising especially as brokers were the main connection for IIB at the time and provided much of IIB's business. These were not personally addressed letters but a general "flyer". But I do agree that its not the "smoking gun" that some make it out to be.

A the end of the day IIB?KBC did not act in the best interests of its customers and did not provide sufficient information or time for their customer to make an informed decision and by that they did not adhere to several parts fo the Central bank code of conduct which form part of the banking regulations and that is where / how customers will get their trackers back - not by what is said in some advertisement.

 

[DamC82]

They did advertise "3 year capped trackers" (i have the advert and press release) and under the code of conduct "all avaliable rates must be offered" The capped tracker was not given as an option.

When you came out of the fixed term or originally?

 

[peemac]

When you came out of the fixed term or originally?

Under the code, when fixed or other special rates are offered to a customer, the customer should be offered all available / suitable rates.

In June 2006 through to at least March 2007, kbc had a 3 year capped tracker rate. KBC argue that they had customers interests at heart with the special fixed rate offers sent in 2006 - but under code of conduct, they should also have offered the capped tracker as an option.

 

[Sarenco]

Under the code, when fixed or other special rates are offered to a customer, the customer should be offered all available / suitable rates.

There is no specific obligation to this effect under the CPC.

 

[peemac]

In relation to the bank Code of Conduct / Consumer protection code. This is not some voluntary "should do" list. According to CB, this is law. So in hindsight, the Ombudsman should have always referenced this in its dealings and its quite obvious that it didn't.

"Regulated entities are reminded that they are required to comply with this Code as a matter of law. Therefore, for example, where a requirement of this Code conflicts with a requirement of any voluntary code to which the regulated entity has subscribed, the requirement of this Code must be complied with nevertheless"

Where KBC in particluar fail is

13 A regulated entity must supply information to a consumer on a timely basis. In doing so, the regulated entity must have regard to the following: a) the urgency of the situation; and b) the time necessary for the consumer to absorb and react to the information provided

KBC gave 6-9 days in mid summer for a consumer to make up their mind, "get independent legal advice", make their mind up, and return the form before the "special fixed rates" expired. Mine even had a yellow highlighter on the "expiry date".


On offering the capped tracker

SUITABILITY
30 A regulated entity must ensure that, having regard to the facts disclosed by the consumer and other relevant facts about that consumer of which the regulated entity is aware:
a) any product or service offered to a consumer is suitable to that consumer;
b) where it offers a selection of product options to the consumer, the product options contained in the selection represent the most suitable from the range available to the regulated entity; or c) where it recommends a product to a consumer, the recommended product is the most suitable product for that consumer.

KBC recommended customers to consider "special fixed rates". If a customer is on a tracker and the bank has the best interest of the customer and has a capped tracker - surely this capped tracker should be offered as without any doubt, the capped tracker was the most suitable product available in KBC to protect agaist rising interest rates? - In newspaper articles at the launch of the capped tracker in March 2006, the head of KBC even said so!

 

[Sarenco]

KBC recommended customers to consider "special fixed rates". If a customer is on a tracker and the bank has the best interest of the customer and has a capped tracker - surely this capped tracker should be offered as without any doubt, the capped tracker was the most suitable product available in KBC to protect agaist rising interest rates?

Not necessarily - that only seems to be the case with the benefit of hindsight. In any event, there is no obligation under the CPC to offer multiple products to a borrower as originally suggested.

As a matter of interest, why didn't you opt for the tracker rate if you thought that was a more suitable product in your circumstances? You seem to be saying that this product was widely advertised.

 

[peemac]

Not necessarily - that only seems to be the case with the benefit of hindsight. In any event, there is no obligation under the CPC to offer multiple products to a borrower as originally suggested.

As a matter of interest, why didn't you opt for the tracker rate if you thought that was a more suitable product in your circumstances? You seem to be saying that this product was widely advertised.

O'd disagree - remember, no-one asked for the fixed rate instruction to be sent. It was an advertisement and it was recommended in the letter informing the customer of a rate rise to look at the special fixed rates on offer in the attached form. That form constituted an advertisement.

On knowing of the capped tracker -
As I had a mortgage I was neither looking for a home or a mortgage and therefore did not puruse the property pages.

Only in finding out information for this issue did I take out subscriptions to archives and find the adverts and articles.