Bank of Ireland borrowers leading a class action against the bank’s tracker mortgage rate rise this month are calling again on the Financial Conduct Authority to take action.
On 1 May, 13,500 BoI borrowers saw their tracker mortgages increase. Around half are buy-to-let borrowers who saw rates increase from 1.75 per cent above base rate to 4.49 per cent above base. Residential borrowers will see their rates rise in two stages, firstly to 2.49 per cent on 1 May and then to 3.99 per cent on 1 October.
The bank blames the rise on increasing capital requirements. In March, FCA chief executive Martin Wheatley said the rise is fair and he has “no concerns” about it.
More than 250 borrowers are pushing ahead with a class action against the bank after receiving “very positive” legal opinion about their chances of claiming damages. They claim the change in mortgage contract is unfair and should not stand.
Under the class action borrowers are being split into amateur and professional landlords. Amateur landlords, who have other jobs and own only one or two properties, may be deemed consumers.
Law Department solicitor Justin Selig, who is leading the action, will write to the FCA and Office for Fair Trading to ask them to take on the consumer case.
Selig says: “The FCA should take proceedings against the bank to say the terms in the mortgage contract are unfair.
“I do not think it has really looked at the documents we have got so we will put a file together in detail and explain the legal arguments behind the action.”
Professional landlords can sue for damages and if it proceeds to litigation they will claim for the extra 2.74 per cent interest for the rest of the term.
Property118.com owner Mark Alexander, who is part of the action, says: “We are very confident because there is plenty of case law, particularly for consumers, comparable to this action.”