The Financial Ombudsman Service has received more than 300 complaints about the Bank of Ireland’s tracker mortgage rate increase.
On 1 May, 13,500 BoI tracker customers saw their rate rise from base rate plus 1.75 per cent to base rate plus 4.49 per cent for buy-to-let deals and base plus 2.49 per cent for residential.
From 1 October, it will rise again for residential borrowers to base plus 3.99 per cent. The bank blames the rise on higher capital requirements.
Following the orginal news, the BoI reversed the hike for 1,000 flexible account customers and 200 more who had switched to a tracker.
More than 300 borrowers are planning a class action, claiming the increase is based on an unfair contract term.
The FCA is considering a request to take on the case and consumers have been encouraged to complain to the FOS by the Financial Services Consumer Panel and Which?.
FOS chief executive Natalie Ceeney says: “We’ve had around 300 complaints. We have our best ombudsman on it and are working hard to find out what the answer is as we’re still at the inquiry stage.”
Your Mortgage Decisions director Martin Wade says: “I think what Bank of Ireland is doing is wrong. While we all know lenders insert these types of clauses, but borrowers do not expect them to be called upon or nobody would go ahead in the first place. BoI should revert the borrowers back to the original rate and offer a goodwill gesture.”