It has recently come to light that some Ulster Bank mortgage customers in Ireland have been undercharged on their mortgages. The problem affects some customers who were on an “Interest Only” mortgage which was supposed to revert to a normal repayment mortgage after a specific time period . In some cases the change to capital and interest repayments was not made at the agreed time by Ulster Bank and now customers are being asked to pay the “underpayment”.
Ulster Bank said thay had “self-identified” an under-payment error affecting some mortgage accounts and that all impacted customers are being contacted, given time to make repayments and can choose from a number of repayment options.
A letter sent by Ulster Bank to a MoneyGuideIreland reader gave the following options:
1. Pay off the underpayment in one lump sum .
2. Pay off the underpayment by increasing monthly payments on the existing mortgage.
3. Add the amount to mortgage and extend the term of the mortgage.
4. Take out an interest free loan for the underpayment amount (max 10 years)
There may be a case to argue for getting these underpayments written off or at least reduced. In the UK in 2010 there was a similar case at Clydesdale and Yorkshire Bank where they miscalculated interest payments . The UK ombudsman ended up getting several of the underpayments written off – some as much as £5000.
If you are affected by this Ulster Bank mistake and you are not happy with the repayment offers – you should make a written complaint explaining that the underpayment was the bank’s error and you paid the amounts asked for in good faith.
If you don’t get a satisfactory response you can take it to the Financial Services Ombudsman . Complaint Form Here . It won’t cost you anything and the worse that can happen is they say you have to repay it.
With the massive system outage at Ulster Bank in 2012 and long delays in implementing mortgage tax relief changes – customers satisfaction levels at Ulster Bank will be falling like a stone.