Q As an AIB customer I took out a fixed-term mortgage five or six years ago but after the term ended I was automatically put onto a standard variable rate mortgage and no mention of a tracker. Am I in line for compensation?
A Maybe, maybe not. Do not assume you will be in line for a payday. Not everyone who had an AIB fixed-rate mortgage was entitled to switch to a tracker when the set term ended. Some people with SVRs who switched to fixed-rate mortgages for a period would most likely have only been offered either a new fixed-rate mortgage or a new SVR mortgage at the end of the term. At present it seems as if only small numbers of people might be in line for redress.
Q Who are they?
A On one level it is very simple: if it is stated in the mortgage contract given to you by your bank that the option of a tracker would be available to you once a fixed-rate term ended and that option was not presented to you, the bank could be obligated to offer you some class of redress.
Q How did this issue come to light?
A In July, the Central Bank concluded an investigation into Permanent TSB. It found that nearly 1,400 customers of the bank and its subsidiary Springboard Mortgages were due substantial refunds following the bank's mismanagement of accounts. The investigation identified "significant failures" including PTSB's failure to inform certain customers of the consequences of their decisions to break early from a fixed-rate or discounted tracker period. The bank also failed to inform other customers of their right to be offered a tracker rate at the end of any fixed-rate period. The investigation prompted questions to be raised about other banks.
Q And have the questions been answered?
A No. As a result of the PTSB revelations, the Central Bank said it was looking into the practices at other banks but it is fairly tight-lipped about the progress. It emerged over the weekend that AIB was giving small numbers of customers who believe they were wrongly denied trackers ECB-linked mortgages as well as debt write-downs or lump sums. According to reports, the bank described the offer as a "goodwill gesture" and has made no admission of liability or wrongdoing.
Q Are there any deadlines in seeking redress? A The law says the Financial Services Ombudsman can only deal with issues which are less than six years old. So if a person took out a two-year fixed-rate mortgage in 2007 which expired in August 2009 and they were not offered a tracker, then under the rules as they stand they will not be able to seek redress through that office.
Q Would I still be entitled to something if it was a buy-to-let mortgage?
A Yes, although the level of compensation offered may be less.
Q Do you have to have a record of having asked for a tracker after you came off a fixed rate mortgage?
A No. If it was in your contract that you could revert to a tracker when the fixed term ended, then the bank was legally obliged to put that option on the table when it communicated with you. If it did not do that then it has a case to answer.
Q What do you do if you think you might be affected?
A Contact your bank and alert it to your concerns. Ask for a copy of the mortgage contract you signed and go through your own paperwork to see if there is any mention of the option of a tracker when the term ended.
