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BoI hits back at loan rate hike amendment in Consumer Rights Bill

Bank of Ireland has hit back at an amendment to the Consumer Rights Bill that could make it harder for lenders to hike rates.

The Government has introduced the Consumer Rights Bill into Parliament to update consumer law and clarify rights on goods and services.

The Business, Innovation and Skills committee has recommended a consumer’s “right to cancel” should be strengthened, especially if the right to cancel did not offer the consumer “the genuine ability to avoid the adverse impact of any change”.

In a BIS committee report published before Christmas, Bank of Ireland’s decision to hike its tracker rates for 13,500 customers last year was cited as an example of the right to cancel as failing to go far enough. Bank of Ireland subsequently reversed the rate hike for 1,200 affected customers.

The Financial Services Consumer Panel has backed the BIS Committee, warning the right to cancel may not protect consumers who cannot secure an alternative mortgage product.

But a Bank of Ireland spokeswoman says: “It is vitally important lenders should have the capability to action the terms and conditions underlying a customer lending agreement if that decision is taken with the long-term stability of the institution in mind and the customers in question are treated fairly.”

London & Country associate communications director David Hollingworth says: “It could be potentially fatal to some institutions if the ability to change terms was not included in the contracts.

“But it needs to be made more clear to borrowers lenders have this power.”

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