Awaiting FSA second response to Bank of Ireland differential increase

by Neil Patterson

5 years ago

Awaiting FSA second response to Bank of Ireland differential increase

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Awaiting FSA second response to Bank of Ireland differential increase

BofI rip offMartin Wheatley the current head of conduct at the Financial Services Authority (FSA) has been strongly criticised by the Treasury Select Committee (TSC) for the FSA’s response to the Bank of Ireland differential increase for thousands of it’s tracker rate customers.

In a letter by Andrew Tyrie MP (chairman of the TSC) Mr Wheatley was accused of  “not addressing the main issues”.

He went on to say “Your response does not tell the Committee whether you were concerned at the action of the Bank of Ireland, what assessment you have made of the impact its decision might be on the rest of the industry, nor how the FCA would act in the event of lenders taking this sort of action in the future,”

In the FSA’s first response to the TSC Mr Wheatley had said the FSA did not plan to take any action against Bank of Ireland over its rate hike that hit 13,500 customers with higher mortgage repayment costs despite no change in under-lying interest rates.

“As these mortgages fall outside of our regulatory remit we do not plan to take further action in respect of the increase to the differential (the difference between base rates and the additional interest charged by the bank). We have reviewed the terms and conditions provided to us by the Bank of Ireland UK and did not identify any concerns which led us to believe the terms may be unfair,”

From next month Mr Wheatley is due to take charge of the FCA, which will be responsible for the regulation of all issues surrounding financial conduct in the UK and this distraction could be the cause for such little time being taken for the consideration of consumers in his first response.

Surprisingly considering what has happened so far, the FSA promised in 2008 to police tracker mortgage rates, saying “tracker interest rate floors need to be clear and unambiguous to the consumer and consistently and prominently spelt out in the lender’s documentation. If it is not, you run the real risk of both breaching our disclosure requirements and having an unfair contract term you can’t enforce”

Unsurprisingly it has been reported that this month the Bank of Ireland chief executive Richie Boucher had been awarded his first pay rise to just over €840,000 (£700,000), a €12,000 increase, despite losses of more than €2bn at the lender.

Mark Alexander said “Property118 will be taking legal advice from Justin Selig of The Law Department on Tuesday next on whether we should instruct barristers to proceed now with a class action, or await the second response from the FSA to the Treasury Select Committee letter from Andrew Tyrie. Justin Selig has kindly sent me copies of the FSA response and the subsequent letter to the FSA from Martin Wheatley MP. I have to say, the questions in the second letter are far stronger and more direct than the first. It seems quite clear to me that Mr Tyrie believes the BoI contract terms to be unfair and he’s looking for the FSA to agree the same. The FSA response will be very interesting indeed.”

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email :


5 years ago

Can we get one thing extremely clear, the FSA do not deal with buy to let, it is not in their remit. They have already stated the changes are not unfair however it is nothing to do with them, you are barking up the wrong tree.

Infact the FSAs own website recommends changing to fixed rate mortgages if you are scared of mortgage rate rises.

I also say that 4.49% is still a very low rate and cheaper when you took your original mortgage out. You should be in no financial strain because of it.

5 years ago

Well perhaps the FSA should also cover buy to let mortgages. Its the principle thats being challenged that is important and if one bank gets away with it on buy to lets whats to stop others doing exactly the same. A contract once agreed whether it is buy to let or a main residence mortgage should be upheld!

5 years ago

it has been, it's just people didn't check the clauses, which by the FSA been judged fair even thought they don't regulate buy to let.

If you are worried switch to a fixed rate and remember to check small print.

David Lawrenson

5 years ago

It could be that the way ahead is under a breach of Unfair Terms in Consumer Contract rules.
If a key clause was indeed in there but not made clear, then it should be challenged - look up Lord Justice Mann's ruling on Foxtons unfair repeat fees charged to landlords... the ability to charge repeat fees in letting contracts was hidden in small print... acted "as a trap to the landlords"... to quote the Judge's high court ruling!
I see absolutely no difference with this case.
People with mortgages with BOI and affected by this should take action

David Lawrenson

David Lawrenson

5 years ago

Here is the OFT's comment on the Foxtons case of hidden clauses on repeat fees.

As far as I can see there would seem to be clear paralells with the BOI rate hike

5 years ago

This is not only about BTL - Residential mortgage holders are being impacted by this as well. So the focus for the MPs is not the Landlords but owner occupiers.

This is where the FSA (or whatever it is now) needs to drill down and dispense pain as appropriate. The product needs to be what it says on the tin. Excuses that the dog has "eaten their homework" and therefore the rules change need to be stamped on.
- If its a Tracker, then it stays a tracker (at same rate) or compensation needs to be paid for the losses caused.
- If its a Fixed, then it stays fixed rate (at same rate) or compensation needs to be paid for the losses caused.

5 years ago

Lets Just Admit the BOI are Skint , thats why I was forced to leave and finance elsewhere

There just treading water, or sinking like Cyprus

Justin Selig

5 years ago

I have met with a barrister today to discuss the case generally and how to proceed to the next stage. We are waiting for a formal opinion which we will receive early next week. In the meantime given the response from the FSA to Andrew Tyrie and then his letter back to the FSA – see attached links and , it is our opinion that we should now write to the Bank of Ireland on behalf of all the borrowers to obtain an initial response to their comment that “if any borrower believed that the differential was for the life or lifetime of the product then they would be excluded from the increase”.

I would therefore like to hear from any borrower who can provide me with evidence that they were led to believe this. I have already heard from over 200 people on this case and I have received copies of terms and conditions from a large number of people. However, if you could provide me with evidence to counter the bank’s claim as set out above, then we have a good starting point. You can email this information to

If you would like us to write to the bank on your behalf, we will require a small financial contribution from you, towards reviewing your terms and conditions and sending the letter. The contribution would also go towards reimbursing for the Counsel’s opinion that they have funded. If you would like us to go ahead on your behalf, please send the following information to us:-

1 Your initial offer letter from the bank

2 The terms and conditions of your mortgage

3 Any marketing material you were provided with at the time

4 Any subsequent correspondence you have received regarding the rate you pay and/or your differential

5 A copy of your passport and a utility bill to confirm your identity.

Upon receipt of the above we will contact you regarding payment and provide you with an engagement letter.

I will update you further next week.

5 years ago

I read the article and I am still confused on what exactly the FSA deals with. I'm sure someone on this site can help me out

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