Key Post Successfully appealed NIB's increase in rate on investment property

Hi Guys,

Just had a look through this tread and I must say it makes very interesting reading for me.

I am a former customer of NIB. I moved my mortgage to another provider after coming of a fixed term rate for 3 years and been put on a rate of 4.15%. This along with other issues I was having with the bank ie, bad customer service, branches closing, taking money from my account without permission.

So my situation is as follows. I took out a Fixed home loan on an ivestment property in august 2006. This expired in August 2009 and I was informed by the bank that my rate was now to become 4.15%. I rang the bank on a number of occasions to dispute this but never got any joy and was told to either take or leave. I chose the later and moved to another provider in februay 2009.

I don't remember ever getting a letter informing me about any change in the mortgage name. I could easily have but don't have the letter. What I do have is my end of year statement for 2009 which is titled "variable rate home loan".

So I think I have a case to take here. I would really appreciate advice on this. If anyone could give me an idea of the correspondence they had with the bank and the ombudsman so as I could follow a similar path. Also if anyone had details of what my interest rate should have been from the period August 2009 to February 2010 it would be much appreciated.

Regards

redovergreen

Reg
 
Hi Reg,

It looks like you had left NIB before they failed to pass on the rate cuts to you. That is if you changed the mortgage in Feb '09.

Is this the case as I am wondering what the relevance of your question regarding the interest rate.

My mortgage agreement on the first page said that the home loan rate applied to the mortgage was the home loan rate less a discount and it stated a percentage.

If you would like to PM me I can share some of the details of my case with you.

However if you left NIB in Feb 09, they probably do not have a case to answer.

I never had a fixed rate I always had a variable rate home loan. So there are probably issues regarding the type of loan as well.
 

Hi Reg,

Can I just clarify that you meant that you left NIB in February 2010 and not 2009 as in your post?
My reading of your post would be that when you came off the fixed rate interest rate in August 2009, NIB moved you to their Investment Loan Rate which was 4.15% rather than their Variable Home Loan Rate which was less than the rate of 4.15%. I would need to check exactly what rate applied to the Variable Home Loan Rate in August 2009 - I suspect it was 0.75% below the 4.15%.
The first thing you need to check is what the initial loan was called when you took it out in August 2006. This will be in your loan agreement. As you were on a fixed rate loan in Feb '09 NIB may not have written to you to say that the name of your loan was being changed. When you came off the fixed rate loan and NIB moved you to a rate of 4.15% did they mention renaming the mortgage? What documentation do you have from this time?

I suspect that you may have a similiar case to one which was recently won against NIB but it all depends on the documentation you have. One thing is that because you moved your mortgage voluntarily in Feb '10 - you may only be able to claim that you were disadvantaged for the period August '09 to Feb '10. This is not likely to amount to a huge amount of money. I am happy to answer any questions either here or in a pm and I am about to post the result of my own case below.
 
Hi all,

I can finally post the result of my own case against NIB which was taken to the Financial Services Ombudsman's Office.
I received notification of the result recently and I am happy to report that I won my case and NIB have had to repay the interest that I overpaid on my mortgage between Feb'09 and March '11.
More importantly they have had to change my mortgage rate back from their Investment Rate to their Variable Home Loan Rate which has knocked 0.75% off my interest rate on an ongoing basis.

To be honest the case involved many letters to and from myself and NIB and then between myself, NIB and the FO's investigating officer. I think I won my case based on several things (which I am happy to share with anyone who wants to know) but also because I could back up what I had said with many pieces of documentation from when I took out the mortgage & when NIB wrote to me in Feb '09.

I have learnt several things from this experience...
* The importance of keeping all documentation.
* The importance of taking the time to write down everything in my letters to the FSO and refuting all of NIB's disingenuous arguments.
* The importance of the service provided by the FSO's office when it comes to one individual person with a complaint against a financial institute - my thanks to them!
* The importance of a forum like AAM - I was inspired and helped by others on here to continue with my own complaint - my thanks to Brendan for AAM and to the other posters on this thread.
 
Butter,

Congrats on your win and thanks for taking the time to respond to me.

You are correct in presuming February 2010. This is when I moved my mortgage to BOI. It ****es me off to now find out I had no need to switch. The period I am talking about is August '09 to Februay '10. Not an awful lot of money but every penny counts.

My loan agreement states that I will transfer onto a Variable Rate Home Loan after the fixed term. I never received any letter to say this would change and my end of year statement for 2010 still calls it this.

I have sent off my first email to NIB and have received the usual response that they are looking into it.

Thanks

redovergreen
 
Butter that's really great news. And a lesson on how to tackle big insititutions. It's great to know the FSO is working for the 'little' people and that we can win sometimes.
 

Hi redovergreen,

A couple of thoughts on your situation...

If your loan was initially was initially called a home loan and the terms of the fixed rate said you would move to the Variable Rate Home Loan and NIB instead moved you to their Investment Rate Loan at the end of the fixed period then I think you would have a case against them.

It may only apply for the months after you came off the fixed rate and voluntarily moved to BoI. But I wonder if you could claim that you were disadvantaged by not getting the Variable Rate available in NIB at the time and ended up paying more by moving to BoI? That would depend on the interest rate BoI offered you? I don't even know if such a thing would be allowed to be claimed in a case like this.

NIB will resist your case to the last degree as this is what they have done in every case so far. I believe that they may even have won a case, or possibly more than one case which was taken to the FSO's office. I do not know the exact circumstances of those cases though, so I am not even sure they were similar to the cases which have been won against NIB. It will also take a long time to get to a ruling from the FSO's office but that is no reason not to try.

If you want to pm me - I would be happy to share a little more detail with you about my own case.


Bronte - that's exactly how I felt when I got the letter from the FSO's office. NIB wrote some stuff in some of their replies that I was quite offended by and it was nice to be vindicated by the decision in the end. David against Goliath, aided by the FSO rather than a sling this time!
 
Just a quick update.
I asked NIB for information about how the refund was worked out and how much was attributable to 2009, 2010 and 2011. At first they did not want to give me the information but I persisted. I got the information yesterday and an email to say that they had made a mistake in calculating what they should have refunded me and now owe me over €300 on top of what they have already refunded me. To say that I have zero faith in how NIB is running their business is an understatement!
 
Another customer who took NIB on

Hi,

I too would like to thank AAM and the posters for sharing their experience and the system that they adopted in dealing with the change of mortgage type applied by NIB.

As Butter mentioned it really did pay to keep all documentation and the FO was only interested if you could support your case with the relevant documentation.

I was refunded the interest from the time I came off a fixed mortgage, May 2009 to March 2011, I was charged an extra .75% as they had changed my mortgage from a home loan mortgage (albeit it for an investment property) to a variable investment mortgage although the product that I took out with them clearly stated in 2006 that it was a home loan.

I also feel very strongly that as the FO can only deal with individual cases the Financial Regulator should be informed and that NIB should be mandated to refund the other customers who were affected.

Many people would not be readers of AAM or have twigged that there was something not quite right. When I made my initial queries with my branch I felt that I was in the wrong- that my assumptions were incorrect- naturally it suited them to try and kill my query at this stage but it was only through this thread that I went back again to my paperwork and started on the process of making a complaint.

Brendan- I wonder are there others who are in financial trouble ( NIB customers) who could clearly benefit if this additional interest was refunded but are not aware of the findings by the FO. Any suggestions ?

Butter- on the computation of interest that was refunded did you send a mail to your local branch requesting a break down ? I was very surprised at the two line letter that I received but they did credit the refund to my current account as requested. However they had to move it from the mortgage account to the current account !!!

Many thanks for the encouragement- it helped enormously.
I received a very nice bottle of vintage champagne from my partner as a 'Thank you '. The saving over the term of the mortgage is very appreciable !!!

Regards
10amwalker
 
10amwalkere can you tell us what bank this was, or PM me.

In relation to your statement about documentation. You said the FO was only interested if you had all the documentation to back up your case but surely the bank has the same documentation?
 

I totally agree with you on this. How can the FO not be in touch with the Financial Regulator about this. Ive no doubt thousands of customers are affected and dont even know it. It was just pure chance I came across this thread and found out about it. (I really owe this site big time. It saved me a lot of money before and hopefully will save me a few bob again)

I have started the process with NIB and as expected the complaint was dismissed by the branch manager. Currently drawing up letter for the second step.

How does the Financial Regulator work. Does he need a complaint from the public to act on this or what.
 

Hi 10amwalker - I phoned & then emailed my branch & asked for a breakdown of how much interest was owed back to me for 2009, 2010 and 2011 and they were quite reluctant to give it to me. I persisted and eventually they emailed a breakdown to me of how much was owed for each month along with a line saying that they had miscalculated the amount owed when they initially made a refund and ho
Like you my letter was first sent out with a very short statement "We are refunding €xxxx to your account". No acknowledgement of why and no sorry.
 
Hi All
Firstly congrats to all who pursued their case and won - fantastic.
I think I am in the same boat - 2 years fixed rate at interest only which expired in Oct 08. Then went onto applicable variable home loan rate (interest and capital) and then received letter in Feb 09 regarding change from 'Variable Rate Home Loan' to 'Variable Rate Investment Mortgage'. I recall ringing up an querying and getting a load of waffle in quite an arrogant tone. I remember checking here on AAM and saw that some of ye were pursuing it but I am only getting back to it now. The same bank person occasionally emails and phones me whenever I am slighly overdrawn on my current account so now here's my chance ! Reading the terms and conditions of the mortgage, I need to go through step 1 (branch), step 2 (Head Office) step 3 (Ombudsman). My only concern is that I may need to go to back to the bank in the future looking to go back on interest only (property is let but rent is down and looking ahead it will be very difficult if tenants move out). But I guess it's in the bank's interest to make it affordable as possible (did I just say that ??)
Have to agree with previous posters querying why the hell cant the FR order NIB to regularise all their investment mortgages ??
 

Hi all,

I have received my final letter from NIB and am now preparing my complaint for the ombudsman. All help would be appreciated.

Here is the excuse the NIB gave me,

"the bank introduced a new reference rate for home loan borrowers, ie those borrowing to purchase their family home, known as the home loan rate in 2009 and extended a discount to those borrowers who met that criteria. As your loan did not qualify for that discount, the rate applied to your account at the end of the fixed rate period was determined by clause 11.4(this is the clause in my contract which states I revert to the variable home loan rate at the end of the fixed period) of your facility letter until its closure"

I take it from this that what they are trying to say is that the standard variable rate in August 2009 was 4.15% and that the rate that was 3.4% was a rate they called a home loan rate and was only available for people borrowing for a family home. Can anyone confirm if this is true or are they telling me a blatant lie.

It seems NIB are willing to fight all complaints regardless of previous rulings from the ombudsman.

Thanks for the help everyone
 

This is true, but you signed your terms and conditions three years previous when they only had the one rate.

I would argue that when I took this mortgage in 2006, I did so with NIB as they did not charge a higher interest rate on investment properties, they offered the same variable home loan rate to all, therefore when my fixed term expired in August 2009 this loan should have reverted to the lower home loan rate as my terms and conditions predate this new (Feb. 09) higher rate applicable to investment properties.

Your case looks different to the other cases here.

Good luck.
 
Hi Reg,

This is the defence that NIB tried to use in my case too. They argued that they still only use one variable rate for both investment and home loans but that they extended a discount to home loans to take account of the economic situation. As mine was an investment loan they said I was not entitled to avail of this "special discount".

I argued back that nowhere had I ever seen NIB advertise a special discount given to homeowners because of difficult financial times in the country. I asked that NIB show where they had written to homeowners informing them of the special discount. No-where that I can see on NIB's website do they show that the variable home loan rate incorporates a special discount. The difference in the rates between home loans and investment loan rates is because NIB passed on the ECB rate reductions to home loans and not to investment loans. They deny that and try and use this special discount as a smokescreen. I am disgusted that they are still trying to do this & not to put too fine a point on it - it is disingenuous in the extreme.

You need to make clear that the reason you chose NIB was because it offered only one variable rate mortgage at the time that you took out the mortgage and this is why you chose NIB. You believed that any changes in the rate would be passed equally to home loan mortgages and investment loan mortgages. You need to show that at no time at drawdown did NIB indicate that they could move your investment loan to another investment rate - you should be on the variable rate home loan still.

You will also need to argue against NIB's so-called "special discount rate". and why you believe it is related to the cuts in the ECB rate which homeowners received and you did not. Your terms and conditions specify that the mortgage should return to the variable home loan rate when the fixed period expired and this is what you are entitled to - not a made up investment loan rate.
 
Got unsatisfactory reply from Bank Manager along the lines of:
...introduced new reference rate for those borrowing for own home and as we didnt qualify (ie investment property) we remain on variable rate.
Rang the manager and we agreed next step is to refer to NIB National Recovery in Tallaght as per terms and conditions. Assuming same reply will be issued, next stop Financial Ombudsman.
 
update on my situation - NIB HQ have accepted my case without having to involve the Ombudsman. Refund provided and monthly payments adjusted going forward. Delighted with this result and big thankyou to everyone here for the help. A special thanks to Butter for the terrific encouragement and guidance throughout the process.
 
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