With a myriad of news reports and lots of jokes flying around featuring the old ‘What’s a tracker mortgage?’ TV ad, it can be difficult to disseminate the facts from the spin and, more importantly, find out if you have been directly affected. However, while this story is only just now making headlines, there was in fact an Irish company working on this issue up to five years ago.
Interest Rate Check Ireland (IRC) began unofficially in 2012 and CEO (managing director), Brian Coleman explains what they found and how the company came into being:
“Having heard all the reports in the media about banks overcharging, we decided to have a look at our own mortgages as we had investment banking experience. We looked into the interest rates and the calculation of interest on our own mortgage accounts,” says Coleman.
“To our surprise, we found that the lending institution was overcharging us interest in our mortgage. We worked closely with a programmer and developed what is called an actual methodology in calculating interest in mortgage loans. We then submitted our findings to the lending institution and engaged in a process with the bank in order to raise questions and to establish what exactly our account was.
“After a period of about 18 months or so, the bank approached us in order to enter into settlement negotiations. We declined to accept what they were offering us as a settlement, and we are still involved in the process of our own case. We then started checking the mortgages of our family members to see how their mortgages were run. We found that one of our family members had been denied their tracker and they are due back over €40,000.00. This is currently being negotiated with the bank.
“Word quickly spread from there and we began giving our time freely, and going around the country to various groups of people who were in trouble with their mortgages. We found that there are issues in mortgages across the board and it is not confined to certain banks, or to those in arrears. It was at this point that we realised that there could be a large amount of people for whom this service might be required, and so we decided to set up Interest Rate Check Ireland Ltd as a business.”
To date, IRC has analysed over 500 Irish mortgage accounts and of those, over 75 per cent have shown irregularities. Bank settlements have ranged from a few hundred euro to over €5,000. And in one standout case the client received over €46,000.
IRC is made up of a group of professionals with decades of banking, finance, compliance, economic and regulatory experience. Their aim is to insure a level playing field for ordinary mortgage holders when they negotiate issues or refunds with lending institutions and/or the Revenue Commissioners. They also work alongside a firm of solicitors who are specialists in the field and take input from other specialists such as programmers and mortgage brokers.
The company offers a suite of solutions to people if overcharging has occurred on their accounts. They can act on behalf of the client and negotiate with the bank, they can produce reports for the Financial Services Ombudsman (FSO) and engage in negotiations for clients through the FSO, and they can assist people who choose to go the legal route.
IRC charges €400-€500 per mortgage analysis. If overcharging has occurred on the account, and the client engages them to try to get the overcharged amount back on their behalf, they request 12.5 per cent of the overcharged amount to be paid to IRC. However, it is important to note that if IRC do not successfully get the overcharged amount back, then there is no percentage to be paid to IRC.