INTERVIEW: We talk to the company that’s investigating overcharging by Irish banks
Brought to you by Interest Rate Check Ireland.
Could your bank be overcharging you?
The average homeowner is in the dark about how their mortgage actually works but the recent tracker mortgage scandal has forced people to take a closer look at their loans. Tens of thousands of mortgage holders were affected by the scandal.
Some customers were contacted by their lenders and offered compensation. Others were left wondering if any mistakes had been made on their account.
That proved to be the genesis of a new Irish company, Interest Rate Check Ireland, who've already helped hundreds of Irish homeowners and businesses to check their own mortgages and secure refunds from their lenders. The company founders were inspired to start the business after analysing their own mortgages and discovering that they had been overcharged.
The founders are a like-minded group with backgrounds in investment banking, coding, programming, retail banking and quantity surveying. They came together to find a methodology for examining mortgage payments.
“We pooled our knowledge and created a model where we can tell if people have been overcharged for their mortgage or not,” explained co-founder Cait O’Beirne, who worked as an investment banker for 15 years.
This model allows the company to effectively measure whether you've been overcharged on your mortgage and could be entitled to a refund. Having thoroughly checked their model, Interest Rate Check Ireland started to take on cases for clients who suspected that they had been overcharged.
Two-thirds of accounts show discrepancies
They’ve checked the accounts of close to 1,200 clients to date and found a surprising number of issues.
“Two out of every three cases we’ve looked at show discrepancies or issues,” confirms Cait. “They ask us to check their accounts on everything from loans, mortgages, insurance policy payments, social housing schemes but especially with tracker mortgages.”
Thousands of mortgage holders affected by the tracker scandal were subsequently contacted by their lender and offered redress or compensation. However, Interest Rate Check Ireland’s analysis has uncovered further cases where no notification was issued by the banks. Their work has already led to some clients’ tracker mortgages being reinstated.
“Tracker denial is one example where people don’t even realise they were denied or that they had the incorrect interest rate applied,” adds Cait.
“We had one case where the bank had sent out a redress letter saying that the client had been overcharged by €1,000. We found that they had been overcharged by €11,000. The biggest refund that we worked on was €47,000.”
What should you do next if you discover an issue?
If Interest Rate Check Ireland discovers an issue, they pass on the information to the client. The client can then take the findings to the financial services ombudsman, pursue it independently with their lender or ask Interest Rate Check Ireland to negotiate a refund with the lender.
“Smaller refund amounts would tend to be €1800 and it goes right up to €47,000,” explains Cait. “Some clients decide to pursue it themselves or we can act on their behalf if they wish. We can give them independent advice and we have our own solicitor. We can check the figures or we can check the figures and follow up with the lender. It’s really up to the clients.”
Breaking new ground in mortgage analysis
The idea of taking on the banks is a novel one. Up until recently, a lack of understanding meant that most people just took their mortgage agreements at face value. Interest Rate Check Ireland are breaking new ground by offering independent mortgage analysis.
“There was no precedent there,” explains CEO and co-founder, Brian Coleman, whose background is in quantity surveying. “We have to try and make a precedent.”
People who took out a mortgage in the noughties could be particularly at risk, although he adds that everyone should have a greater understanding of their mortgage terms and how their repayments work.
“If you took out a mortgage between 2002 and 2008, there is a high possibility that the tracker issue may have affected you and you may not even know it,” he explains. “People probably need a bit more awareness of loans and specifically of mortgages.
“It’s quite complex so people have to know what the banks are doing and what method they use. We can show you what method is used and break it down to what the bank is doing on a daily basis.”
As well as looking for overpayments or discrepancies, the company also offer individuals and businesses debt restructuring services, advising them how they can pay down their debt quicker. This can also help in negotiations with their lender, particularly in repossession cases.
Interest Rate Check Ireland has taken on cases where repossession orders have been granted by the courts but were subsequently voided as a result of their findings. In another case, a client was preparing to declare bankruptcy because the bank claimed the client owed €700,000. A check of the figures revealed that the actual figure was €500,000, allowing the client to avoid bankruptcy.
Anyone who believes that there could be an issue with their mortgage, or who just wants an independent assessment, can get a debt restructuring analysis for €200 or a residential mortgage analysis for €400. Businesses who wish to have commercial loans assessed can call up for a quote.
“Your mortgage is the biggest debt you’re ever going to have so it’s worth a review,” points out Cait. “We say to clients to come back every five years to get it checked.”
Brought to you by Interest Rate Check Ireland.