Tag Archives | Ulster Bank

Ulster Bank mortgage “glitch” – what happened, when, and who noticed what?

If you're reading this, you're probably on a PC with internet filtering, or a poor connections, so you're missing a logo image for Ulster BankI’m intrigued by this story about Ulster Bank screwing up again at the expense of their customers. However, in this particular case, I’m finding it hard to have any sympathy for the 1300 affected borrowers.

Known, contracted and agreed

These customers, who in the most part had mortgages with First Active before it was taken over by Ulster Bank, had agreed to pay interest only on their mortgages for a period after which they would convert the repayments to both interest and capital at an agreed date.

A key reason for my lack of sympathy here is the word “agreed”. The borrower agreed to this deal with the lender. They would have known what they were getting into, and would have been aware that on a certain date, they’d be subject to larger monthly payments.

It would have been noticed

But when that date arrived, and the mortgage payments didn’t increase, what did these 1300 borrowers do?

If my understanding of such mortgage products is correct, then the monthly mortgage repayments at that agreed date from which capital would be repaid would significantly increase. Using the numbers provided in this Irish Times article, the monthly payments would have increased by €500 up to €1250 per month, with the average increase being around €700.

What was done with the money?

So, you’re expecting to have to stump up €700 next month on your mortgage payments – you’re going to be ready to be able to pay it. But the demand never comes from Ulster Bank. Did the people concerned save the extra money every month, in anticipation of when Ulster Bank would finally come knocking?

Did they just merge the spending of the money into their normal outgoings – that’s a big bump in standard of living to have an extra €700 per month to spend.

Sensible

For anyone who was saving the money away monthly, at an average rate of 2.5% over the period, they could have ended up with a savings bundle where they’re comfortably able to repay the amount in one lump sum. And if they still take advantage of the Ulster Bank offer of repaying the amount over an extended, interest free, period, then they’re laughing.

Human Interest

I’d love if one of our personal finance journalists found an Ulster Bank customer in this situation and asked them exactly how this all happened. Were they aware that Ulster Bank made this mistake at the time? Assuming they said nothing, what was their thought process in deciding not to contact Ulster Bank and volunteer repayments? And what did they do with the money the expected to pay, but didn’t have to, each month?

And a question for Ulster Bank – did any mortgage customers impacted by this over the past 5 years actually come forward to highlight the problem? I’m guessing not if that didn’t trigger an earlier investigation by Ulster Bank – unless it was someone coming forward now that brought it all to light now.

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Undercharging of customers by Ulster Bank and First Active

This research page on ValueIreland.com tracks the number of overcharging incidents by some of Irelands best known companies since 2004.

Just to be fair, we also keep track where companies have revealed that customers have been undercharged – but have a look just to see how the overcharging (in favour of the company) vastly outnumbers the undercharging (in favour of the customer).

Last week, it was revealed by Ulster Bank and First Active (essentially the same bank now that they’re both owned by Royal Bank of Scotland (RBS)).

According to this article from the Irish Times:

AT LEAST 13,000 Ulster Bank and First Active customers have been told their banks under-deducted Deposit Interest Retention Tax (Dirt) on their savings accounts. The two banks have written to affected customers in the past week about the miscalculation of Dirt. A spokeswoman for Ulster Bank said letters had been sent to 6,500 customers of its subsidiary, First Active. The bank says the miscalculation occurred as a result of a systems error and the average amounts involved for each customer are small – just €1 in the case of First Active.

In this situation, as it’s a tax deduction, the extra money was taken from the customers accounts. In some previous cases, the undercharging banks took the hit instead of taking the money.

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“People with variable rate mortgages have no right to rate cuts”

I’m a big fan of the writings of Karl Deeter on the Irish Mortgage Brokers Blog. His coverage of the many differing finance topics of the day are very readable and most of the time make somewhat complex issues quite understandable.

This blog post, in light of other statements we’re hearing in the media recently, gave a very understandable reasoning for why banks aren’t (or shouldn’t) pass on recent interest rate reductions by the ECB:

People with variable rate mortgages have no right to rate cuts, variable rates are determined by individual banks and while AIB or BOI might be justifiably forced to pass on the rate cuts any bank that was not directly bailed out should be running a prudent business and if rate cuts are not on the table of prudent business then don’t do it.

This post was in response to statements from the Ulster Bank and First Active that they wouldn’t not be passing on the most recent interest rate cuts.

You should read the full post here as it goes on to expose the fallacy of the statement from both banks that they were doing this in favour of their savers rather than mortgage holders since their saving accounts don’t rate in the top 5 of any category.

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Get some free money back from the banks

Irish News of the World

Sunday March 1st, 2009

Diarmuid MacShane

Get some free money back from the banks

Have you had enough of your current account or credit card provider? Are you sick and tired of what they’ve been getting away with, or are they just not giving you the service that you’re looking for? So switch, and in the process get some free cash.

Ulster Bank have done this in the past, and now PermanentTSB are offering you free cash to switch your current account to them. Halifax (Ireland) are also offering you cash to open a credit card account with them.

If you switch your current account to PermanentTSB and stay for at least a year, they’ll give you €150. There are some conditions which include a minimum deposit of €1000 and saving €100 per month, but in a year you’ll get the free cash.

If you open a new credit card account with Halifax (Ireland), they’ll deposit €100 into your account after your first purchase. They even offer a relatively competitive rate compared to some other credit cards on the market.

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What happens when your credit card is put “at risk”?

Another article in the recent Sunday Tribune details a persons problem with AIB after their credit was apparently skimmed, and they had €3500 taken from their account.

Lets get past the fact that someone can have so much money in their account that they don’t notice €3500 being taken over a period of a couple of months, and look at some of the issues here – some of which I’ve experienced myself.

We know for a start that this AIB customer is never going to be told where his credit card was skimmed. This is because AIB and the Irish Payments Service Organisation (IPSO) will lie to him and tell him that it’s against Data Protection regulations to reveal where the card was skimmed. There are no such regualtions, and this like is only intended to protect the business or bank that allowed the card to be skimmed.

I’m in the middle of such a “discussion” with my bank at the moment. They called me recently to tell me that because my card was “compromised” it was going to be cancelled and reissued. They wouldn’t tell me where or how it was compromised or what transactions triggered their “suspicions”. After 3 months of queries, emails and letters, I have still received no information.

My arguement is that I used my credit card “somewhere” that caused the credit card companys suspicions to be aroused enough for them to cancel my credit card.

Yet, when I try to find out where it was that I used my card so that I can avoid using it in the future, they won’t give me that information.

Like most banks when it comes to “responding” to customer complaints, they have taken over 3 months of rejecting my requests for information in the hope that I’ll forget about it and move on – and saving them having to actually answer any real questions.

Which is all fine and good – they’ve probably bored me into submission on this one as well. That, or else my next step will be to send in a data request to their Data “person” where I’m allowed request all the information that they hold about me on their files.

But I know that’s not possible in this case since my credit card company actually uses a foreign company to process my credit card transactions and it is on their computer records that any information about “suspicions” that caused my credit card to be cancelled are stored. And I have no legal backing to allow me get that information.

And the best bit – none of our consumer protection organisations have any jurisdiction in this matter. And that’s despite that anyone who now banks with Ulster Bank, National Irish Bank or Halifax and have credit cards with them could find themselves in similar regulatory “no mans lands”.

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Save money on your Ulster Bank Credit Card interest rate

I know I’m supposed to be on holidays at the moment, but here’s a quick tip if you’re reviewing your finances as we’re heading into the New Year, 2009.

If you have a credit card with Ulster Bank the advertised interest rate is 17.9% (or 15.9% on the Zinc card that I have had).

I rang this morning to close my account having paid off the balance and they immediately offered me their “staff only rate” of 7.5% – a full 10% less than their basic rate and 8% better than their Zinc rate – more than a 50% reduction straight off.

So, if you’ve an Ulster Bank credit card, and don’t always pay off the balance monthly, give them a ring straight away, tell them you’re closing your account because you’ve got a better deal elsewhere, and see if they offer you the same rate.

I guess a lot of service providers (financial and otherwise) will be similarly keen to keep our business in 2009. It’ll probably be worthwhile ringing all of them that you deal with in the coming weeks to see what they can do to keep your business.

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The Institute of Customer Service

I was doing a little research for a Value Ireland article I’m hoping to publish in the next few weeks when I came across the Institute of Customer Service. What a great idea, I thought, especially for us in Ireland where we regularly suffer from shockingly poor customer service. According to their website:

The Institute of Customer Service is the professional body for customer service. Our main purpose is to lead performance and professionalism in customer service.

It seems like it’s a primarily UK based organisation, but, strangely, Dublin City Council is something called a “founder council member”. Back in 2005, DCC hosted a conference to try to entice other Irish businesses to join.

Now, I’ll be the first to highlight that I’m very cynical about many of these so-called professional organisations – most of which appear to be for the benefit of those who’ve set them up to keep themselves in jobs through member subscriptions.

But here’s the listing of Irish companies, or other companies who operate in Ireland, who are members of the Institute of Customer Service:

  • Allianz Ireland
  • Avis
  • Bewleys Coffee Ltd.
  • BT
  • Conduit Ltd.
  • Dublin Bus
  • Dublin City Council
  • First Active
  • Halifax Bank of Scotland
  • Irish Life and Permanent
  • Kerry Group
  • Nestle
  • O2
  • Oracle
  • Pricewaterhouse Coopers
  • Stena Line
  • Tesco
  • Ulster Bank
  • Vodafone
  • Zurich Financial (Eagle Star)
From personal experience, having dealt with some of these companies, I can say that I’ve never had issues with the customer service from O2, Dublin Bus, Vodafone, Irish Life & Permanent, Tesco, Stena Line or Eagle Star. I have had serious problems with Ulster Bank and First Active (both part of the same RBS group) and I’ve heard many stories about peoples issues with BT.

Do you deal with any of these companies? Have you noticed that their customer service offering is significantly better than their direct competitors? Should we be crying out for all Irish businesses to become members, or does it not matter. Should membership of such an organisation not actually be a pre-requisite for looking after your customers?

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Another bank stealing money from their customers, again

For the second time in four months, Ulster Bank has admitted that it stole money from it’s customers. This time it was students it picked on, admitting that it took upwards on €950,000 from 26,000 of them – an average of €88 per student. The bank said an internal review discovered that it had applied the charges on the registered student accounts, which are not supposed to have any interest or charges imposed on them.

This now means that in the past 3 years, some of the biggest Irish businesses have admitted to stealing/overcharging 1,501,973 Irish consumers by €113,709,000. You can read further here on Value Ireland for a full breakdown.

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Overcharging Ireland, again

Another, and if I’m not mistaken, the last remaining Irish bank has now come out and admitted that it too has overcharged it’s customers. Today Ulster bank has admitted that it overcharged 25000 customers €4m.

Does it even matter how, or why they thieved this money from their customers? If you are interested in the details, as per usual, you won’t find anything on the Press Release section on their website. You won’t find it either on their What’s New? Section on their homepage either.

Click here to read the Breakingnews.ie version of the story.

This now brings (as far as we in Value Ireland can estimate) the total number of Irish customers overcharged by Irish businessess to 1,322,200 and to the tune of €111,743,000m. Our continuously updated analysis of overcharging in Ireland is available here.

Just look at those numbers again – they’re unbelievable.

One thought! I wonder what kind of “ongoing review” were Ulster Bank doing to find this mistake? Were they looking for instances of overcharging? Shouldn’t that have been completed a couple of years ago? Or I wonder did someone find the problem and highlight it to Ulster Bank, which then lead to the review in question?

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Ulster Bank Customer Service

I was reading this evening in AskAboutMoney about the experiences of one reader about their frustration regarding Ulster Bank customer service – you can read the thread here.

I’d like to echo this given my frustrations with Ulster Bank over the past couple of months. This has also included a complete refusal to reply or acknowledge any letters sent to them, including one directly to the bank manager.

Given all the advertising Ulster Bank have at the moment offering money to prospective new customers, I’d recommend to anyone thinking about it not to bother. While you’ll get €150 for a new bank account or €1500 for a new mortgage, you’ll actually only be repaid with your own frustrations in the future.

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