Friday 21 October 2016

Bank of Ireland refuses to back down in row over tracker letters

Published 21/08/2015 | 02:30

Fianna Fáil finance spokesman Michael McGrath
Fianna Fáil finance spokesman Michael McGrath

Bank of Ireland has denied it is being investigated by the Central Bank over a letter sent to tracker mortgage holders, trying to lure them on to a more expensive fixed rate.

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But this newspaper understands that regulators are looking into the matter, and asking the bank why it apparently contravened regulatory rules by trying to get customers to come off good-value tracker rates.

Regulators are precluded from naming firms they are investigating.

Bank of Ireland has been accused of acting in an underhand way after it sent a letter to customers with tracker mortgages, telling them about fixed rates.

The letter, which has been seen by the Irish Independent, makes no mention of the cost and implications of giving up a tracker. This is in contravention of Central Bank rules.

Ditching a tracker for a fixed rate could see repayments increase by €300 a month for a typical mortgage holder.

It is the second time in three years that Bank of Ireland has tried to trick its customers out of good-value trackers.

But a spokeswoman for the bank insisted there was no investigation being carried out into the letter-writing campaign, and said it is not breaking any rules. "The letters are not the subject of a Central Bank investigation," she said.

Fianna Fáil finance spokesman Michael McGrath said he was not surprised the bank had used "sneaky measures" to encourage people away from trackers.

"The banks would move high heaven to get people off their tracker mortgage rates," he said.

"While no one knows for sure the future direction of interest rates, the fact is that the European Central Bank base rate would need to increase dramatically for people on trackers to be better off fixing their rate.

"There is no sign of that coming down the track in the short to medium term."

Irish Independent

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