The Bank of Ireland has been accused of attempting to trick customers into switching from low interest rate tracker mortgages to more expensive fixed-rate loans.
A letter was sent to 300 customers in the Republic of Ireland last month, suggesting that they consider switching to fixed rate mortgages if they are concerned about protecting themselves against future rate increases.
RedC is a research and marketing company which tracks political opinion polls in Ireland and the results of one survey, which found that many people were concerned about the consequences of rising interest rates, were published in the letter.
It suggested that customers with any such concerns should contact the bank for advice, which includes switching to a fixed-rate deal.
The letter was read out at a hearing of the Joint Oireachtas (parliament) Finance Committee by government deputy, Labour’s Kevin Humphreys who claimed that the bank was attempting to sway people towards more expensive products.
“I put it to you that you are trying to trick people off tracker mortgages”, said Humphreys at the hearing.
However, senior executive Liam McLaughlin said it was not the bank’s intention to trick customers.
He said the letter had been sent out as part of research being done by the bank, which wants to know the extent of customer demand for fixed-rate deals so it can source money in the markets.
Monthly repayments for customers with tracker mortgages can change because the interest rate rises and falls in tandem with that set by the European Central Bank.
These rates are at an all time low; good news for borrowers but bad news for the banks.
Statistics recently revealed by the Central Bank in Ireland found that interest rates on loans from Irish banks are higher than the European average, although longer term loans are below the average.
Loading ...