Brendan Burgess
Founder
- Messages
- 52,046
Decision 2020 -0138
Bank employee had a staff preferential rate of 2.5% variable on one part of the loan and a tracker of ECB +0.8% on the balance.
The main complaint was that when the ECB rate fell so that a tracker rate would have been cheaper than the staff preferential rate, the bank should have moved that loan to a tracker.
The Ombudsman did not agree with the borrower and there was no obligation on the bank to offer them a tracker on the staff preferential loan. (The borrowers could have switched to the tracker at any time it was available and did not do so.)
That all seems fairly obvious to me, but the side issue was more important
Claire and John further detailed that the European Standardised Information Sheet (ESIS) furnished to them by the bank, provided
that the staff rate on the mortgage account was fixed for a period of 2 years and would roll to the tracker rate at the end of that fixed period. They stated that the bank failed to offer them a tracker interest rate for the staff rate account in September 2009 when the two-year fixed rate
period expired.
...
The bank outlined that the European Standardised Information Sheet served to provide information to a mortgage applicant
prior to their acceptance of a mortgage product and was for illustrative purposes only. It accepted that there was a ‘manual error’ in the
information contained in the assumptions at the end of the Illustrative Amortisation Table where it outlined that the ‘rate is fixed for 2 year(s)’.
...
The Ombudsman was disappointed that a factually incorrect assumption was erroneously included in the European Standardised
Information Sheet by the bank. Notwithstanding this error he found that it was clear that the mortgage loan documentation did not provide
for a fixed rate period of 2 years.
Bank employee had a staff preferential rate of 2.5% variable on one part of the loan and a tracker of ECB +0.8% on the balance.
The main complaint was that when the ECB rate fell so that a tracker rate would have been cheaper than the staff preferential rate, the bank should have moved that loan to a tracker.
The Ombudsman did not agree with the borrower and there was no obligation on the bank to offer them a tracker on the staff preferential loan. (The borrowers could have switched to the tracker at any time it was available and did not do so.)
That all seems fairly obvious to me, but the side issue was more important
Claire and John further detailed that the European Standardised Information Sheet (ESIS) furnished to them by the bank, provided
that the staff rate on the mortgage account was fixed for a period of 2 years and would roll to the tracker rate at the end of that fixed period. They stated that the bank failed to offer them a tracker interest rate for the staff rate account in September 2009 when the two-year fixed rate
period expired.
...
The bank outlined that the European Standardised Information Sheet served to provide information to a mortgage applicant
prior to their acceptance of a mortgage product and was for illustrative purposes only. It accepted that there was a ‘manual error’ in the
information contained in the assumptions at the end of the Illustrative Amortisation Table where it outlined that the ‘rate is fixed for 2 year(s)’.
...
The Ombudsman was disappointed that a factually incorrect assumption was erroneously included in the European Standardised
Information Sheet by the bank. Notwithstanding this error he found that it was clear that the mortgage loan documentation did not provide
for a fixed rate period of 2 years.