AIB Tracker Redress“A lot of them think it’s a Lotto win, they weren’t expecting it.”

As heard on Today with Sarah McInerney

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Waking up to find that your bank has shaved thousands of euro off your mortgage doesn’t happen every day, but it’s exactly what happened to some mortgage customers of AIB Bank earlier this week. The payments, which the bank apparently made without informing customers, form part of a long-running saga often referred to as the tracker mortgage scandal. And it’s not over yet, according to Brendan Burgess, consumer advocate and founder of AskAboutMoney.com. Brendan spoke to Sarah McInerney on Thursday about the latest developments: 

“It’s a good news story in that there are just short of 6,000 people and they’ll be getting somewhere around 30 to 40 thousand each in a combination of their mortgage balance being written down and interest being paid on that.”

Brendan and Sarah’s chat included some background to the tracker mortgage story as well as the statement issued by AIB, talk of possible legal action and finally, Brendan had one suggestion which could save some of the group even more money in the future.

To provide context for the “surprise” payments, Brendan, who has been campaigning on this issue for some time, summarised the story of the 5,900 AIB mortgage customers who took out mortgages in a period between 2006 and 2008:

“They had a term in their contract that said at the end of this fixed rate, if they fixed their mortgage rate, you’ll get a tracker at the then prevailing rate. But when the fixed rate ended, if it ended after October 2008, well, AIB just said ‘we don’t do trackers anymore, so we’re not giving you a tracker.’ And I have fought this for 5 years.”

A judgement by the Financial Services and Pensions Ombudsman (FSPO), in a case taken by one of the mortgage holders, went against the bank in February this year. The FSPO made a number of recommendations for redress. The recent payments are part of this, but they came as a complete surprise to most people, says Brendan:

“A lot of them think it’s a Lotto win, they weren’t expecting it. In fact, I would say of the 6,000, I’d say 5 and a half thousand know nothing about this. I mean I don’t know anybody who checks their mortgage balance, I mean people do check their current account. You sort of know what your balance is,  roughly, the money coming off it every month.”

AIB Bank provided a statement to the show, referring to the time it took to look at each of the 5,900 mortgages individually, as well as the steps the bank is taking following the FSPO judgement against them. The bank says they propose to write to customers in the near future. Sarah noted that there was no mention of compensation for stress which mortgage customers may have faced over a number of years. Brendan says some people suffered considerable disruption:

“People lost their homes and they will have to get very significant compensation.”

Brendan thinks that some of the 5,900 mortgage holders will let the matter lie after this, but he thinks yet others may seek a legal opinion on the original tracker provision in their mortgage:

“I think some people are going to definitely go to the High Court and get the High Court’s opinion on this.”

Finally, Brendan Burgess pointed out that with their mortgage principle now reduced, a new loan-to-value ratio could mean even lower interest rates for some mortgage holders in this group.

It’s well worth having a listen to Sarah McInerney’s full interview with Brendan Burgess, which gives more of the background of the story and what future developments might look like. There is also more detail on the AIB statement. You can listen back here.

There are also discussion threads on this topic on Brendan Burgess’ website askaboutmoney.com.

Ruth Kennedy

© The Listener 2020

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