EBS What does an EBS "Variable Base Rate" mortgage mean?

B26354

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292
On the EBS Variable Base Rate Cohort or a particular case?
I think if a decision is made on a particular cases being investigated now it could be applied to the cohort.cant be certain of that but that’s what AIB did with prevailing rate group?
 

Bill2018

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13
New list of judgements out today but nothing addressing variable base rate as far as I can see.
 

B26354

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292
I think the Ombudsman must look at this matter simply.
What is a base rate?
What is a variable rate?
Then, what would a consumer reasonably think a variable base rate is, particularly where the lender has not provided pre contractual or contractual definitions of same.
I’m sure the ombudsman is aware that a definition of the “variable base rate” as a tracker does exist and was disseminated to customers by EBS. Many variable base customers did not receive this definition from EBS but some did.
 
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B26354

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292
Have you got the pre contractual or contractual definition of variable base rate that EBS gave you? If yes, can you post it to the thread?
I don’t quite understand the difference between a contractual or pre-contractual definition?

There is a definition of the variable base rate that was used by an agent/broker of EBS called mortgageireland.ie that was available on their website from 2006 (see attached); this definition references a dependency an underlining central bank rate. Remember EBS have since confirmed that their SVR is not linked to or dependent on any central bank rate.

Tellingly, there is also a mortgage illustration sheet definition that was provided to some EBS customers by EBS that clearly defines the variable base rate as a tracker rate. I have seen this definition & have it but i’m sure the people & organisations important in this complaint have also seen it ;)

It’s a fairly sensitive time for this complaint & I don’t know which way it will go so don’t want to reveal too much for obvious reasons.
 

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Blueskies20

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Hi all, I received my final response letter today from EBS, all 3 pages of it to say that they conclude "their consideration of my complaint is complete". My case is much the same as a few others on this thread. I received my loan offer June 2005, with a variable base rate of 3.25%, which was 1.25% above the ECB rate at that time (ECB 2%). I have every correspondence since then with all letters from EBS detailing until 2008 that my rate increased along with a rise in the ECB rate hike.
Here are a couple of statements in their letter that seem to be very strong wrt SVP Vs VBR. "With regard to your comments about the standard variable rate, we confirm that there in no difference between the variable base rate and the standard variable rate. The variable Base rate was not replaced by the standard variable rate. Both terms were used to describe the Banks variable interest rate product."
"The variable base rate did not and does not follow the ECB rate and was never contractually linked, or otherwise stated to be linked, to the ECB rate"
They go on to say that they did exercise their discretion to adjust the VBR when the ECB rate moved from 2005-08, supporting this by saying that they moved the VBR at other times including before, during and after when tracker interest rates were available.
The also sent a copy of the original loan application which did not have the option of "tracker" in it only variable and fixed, ticked on mine was variable. My variable rate mortgage was then tracked to the ECB until it did not suit EBS anymore. I would like to see an application form from this time which specifically uses the phrase tracker.

Any advice would be great, do I now submit my complaint to the FSPO ? Anyone get the same response and going to continue with the FPSO ?
Thanks all, stay well
 

demoivre

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2,650
Any advice would be great, do I now submit my complaint to the FSPO ? Anyone get the same response and going to continue with the FPSO ?
Thanks all, stay well
You have nothing to lose by by going to the FSPO. I would take what the bank says with a grain of salt.

Here are a couple of statements in their letter that seem to be very strong wrt SVP Vs VBR. "With regard to your comments about the standard variable rate, we confirm that there in no difference between the variable base rate and the standard variable rate. The variable Base rate was not replaced by the standard variable rate. Both terms were used to describe the Banks variable interest rate product."
I've said it before and I'll say it again , if the bank had intended for borrowers to move to a standard variable rate they should have said so plainly and simply in the mortgage contract. Had banks intended for borrowers to move to a tracker rate that should also have been stated plainly and simply in the mortgage contract. However they didn't and instead they used ambiguous terms .

What they have said above is, imo, in direct contravention of Section 3.6 of the Framework document, which states:

3.6.1 In the course of the Examination, and in the context of the transparency of the documentation provided to customers, the lender is to consider whether there was potential to confuse or mislead customers including, but not limited to:

a particular term pertaining to the loan agreement was given different meanings by the lender at particular points in time or whether certain terms had dual meanings, with the potential to confuse customers;

products or interest rates were given different names with the potential to confuse customers in relation to the nature of the product or rate;

complicated terminology that had the potential to confuse or mislead a customer was ever used;

definitions of product/rate types were clearly set out, for example, in loan offers;

 terminology used by the lender pertaining to the loan agreement was consistent across all documentation provided to a customer, for example, in both a Rate Change Authority and the Loan Offer


The explanation given to Blueskies20 in the quote above is clearly in breach of these guidelines. IMO there are also clear breaches of the Consumer Protection Code and the EU directive on unfair terms in contracts, but it's been done to death in different threads, and for different banks.

The FSPO and / or the courts will ultimately decide how this all pans out.
 

Trackman

Registered User
Messages
41
Hi all, I received my final response letter today from EBS, all 3 pages of it to say that they conclude "their consideration of my complaint is complete". My case is much the same as a few others on this thread. I received my loan offer June 2005, with a variable base rate of 3.25%, which was 1.25% above the ECB rate at that time (ECB 2%). I have every correspondence since then with all letters from EBS detailing until 2008 that my rate increased along with a rise in the ECB rate hike.
Here are a couple of statements in their letter that seem to be very strong wrt SVP Vs VBR. "With regard to your comments about the standard variable rate, we confirm that there in no difference between the variable base rate and the standard variable rate. The variable Base rate was not replaced by the standard variable rate. Both terms were used to describe the Banks variable interest rate product."
"The variable base rate did not and does not follow the ECB rate and was never contractually linked, or otherwise stated to be linked, to the ECB rate"
They go on to say that they did exercise their discretion to adjust the VBR when the ECB rate moved from 2005-08, supporting this by saying that they moved the VBR at other times including before, during and after when tracker interest rates were available.
The also sent a copy of the original loan application which did not have the option of "tracker" in it only variable and fixed, ticked on mine was variable. My variable rate mortgage was then tracked to the ECB until it did not suit EBS anymore. I would like to see an application form from this time which specifically uses the phrase tracker.

Any advice would be great, do I now submit my complaint to the FSPO ? Anyone get the same response and going to continue with the FPSO ?
Thanks all, stay well
Hi

My loan offer states my loan type was a Variable Base Rate. 2006.

I was not given a choice to tick a variable or fixed rate at the time.

What I did sign was a tracker application which the bank failed to administer resulting in us starting on a VBR and magically converting to an SVR(2008).

Likewise 2006-2008 we received letters of notification that the interest rate was going up in line with the ECBs.

It matched all of the increases up but never down.

EBS conceded the case.

In essence you and I both had variable base rate in our loan offers but we had different products.

Both of us ended up on different products than we signed for.

Surely the FSPO will find in your favour.
 

B26354

Frequent Poster
Messages
292
Hi

My loan offer states my loan type was a Variable Base Rate. 2006.

I was not given a choice to tick a variable or fixed rate at the time.

What I did sign was a tracker application which the bank failed to administer resulting in us starting on a VBR and magically converting to an SVR(2008).

Likewise 2006-2008 we received letters of notification that the interest rate was going up in line with the ECBs.

It matched all of the increases up but never down.

EBS conceded the case.

In essence you and I both had variable base rate in our loan offers but we had different products.

Both of us ended up on different products than we signed for.

Surely the FSPO will find in your favour.
You would think the FSPO would rule in our favour considering the amount of smoke around this issue when looked at as a group. But EBS/AIBs argument is about individualising cases to reduce contagion (sorry couldn’t help myself!!)

They will say that you signed a tracker application or that another person received the mortgage illustration sheet that said it was a tracker but if you didn’t have these then they argue you will not be redressed. Then there are the potential numbers for redress involved and politics may kick in but hopefully not.
 

paulo1000

New Member
Messages
5
You would think the FSPO would rule in our favour considering the amount of smoke around this issue when looked at as a group. But EBS/AIBs argument is about individualising cases to reduce contagion (sorry couldn’t help myself!!)

They will say that you signed a tracker application or that another person received the mortgage illustration sheet that said it was a tracker but if you didn’t have these then they argue you will not be redressed. Then there are the potential numbers for redress involved and politics may kick in but hopefully not.
Is the tracker application form part not irrelevant, as it is not a legally binding document?? In one case here a tracker application was not even processed by the EBS. So I don't buy that argument by EBS that you never applied for a tracker. I didn't apply for an SVR either. I only ever applied for a fixed rate when there were no SVR's available (2007).
The most important argument is that, 'Variable base rate' is written in the mortgage contract. This should mean the same thing to all customers. And why would EBS remove the word 'base' from their terminology?
Now, EBS have three terms, VBR, variable and SVR to describe the same product. And they don't like to use the term VBR anymore. It doesn't appear anywhere after my mortgage contract documents. I cannot find a definition of VBR anywhere in my own mortgage documents.

I have just received a final response letter from EBS claiming that the VBR and SVR are the same thing. I've also received a letter from the FSPO that they will be in touch with me in the next 8 weeks to run a voluntary mediation process by phone and if it is not resolved it will got to the courts.

Do people recommend that I get a financial advisor to help with my case? I cannot see the mediation process going anywhere? How can I convince the bank of anything otherwise? I have no background in law, finance or banking, so how can I argue a case against the EBS?
 

haveaniceday

Frequent Poster
Messages
143
Is the tracker application form part not irrelevant, as it is not a legally binding document?? In one case here a tracker application was not even processed by the EBS. So I don't buy that argument by EBS that you never applied for a tracker. I didn't apply for an SVR either. I only ever applied for a fixed rate when there were no SVR's available (2007).
The most important argument is that, 'Variable base rate' is written in the mortgage contract. This should mean the same thing to all customers. And why would EBS remove the word 'base' from their terminology?
Now, EBS have three terms, VBR, variable and SVR to describe the same product. And they don't like to use the term VBR anymore. It doesn't appear anywhere after my mortgage contract documents. I cannot find a definition of VBR anywhere in my own mortgage documents.

I have just received a final response letter from EBS claiming that the VBR and SVR are the same thing. I've also received a letter from the FSPO that they will be in touch with me in the next 8 weeks to run a voluntary mediation process by phone and if it is not resolved it will got to the courts.

Do people recommend that I get a financial advisor to help with my case? I cannot see the mediation process going anywhere? How can I convince the bank of anything otherwise? I have no background in law, finance or banking, so how can I argue a case against the EBS?
 
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