First Active Tried To Get Me Off my Tracker

Rabidlamb

I'd heard about this practice on Matt Cooper but never thought I'd be on the receiving end.

I got a call about an hour ago from my local First Active branch inviting me to come in & discuss their new atractive fixed rates for existing customers.
I informed him I was very happy with my .95% tracker & wouldn't consider leaving it in the current climate.
He reacted suprised & clainmed that he didn't know I was currently on a tracker :rolleyes:.
To keep the conversation alive he tried to offer me some new Home Insurance product instead, I told him to post out the quote.

Anybody else have a similar experience recently ?.
Presumably they want you to call in so they can get you to sign the form there & then without thinking too long about it .

Sneaky.

IsThatSo?

:eek:

Very sneaky, and nasty too. If they ring you again ask them to send out the information, with rates, on the one they are offering to replace your tracker with. If its not in your favour make a complaint to their CC dept, or the Financial Regulator.

Somebody somewhere is going to fall for this. Fair enough if its in their favour, but I would have my doubts about it being in the customers favour, tbh.

It seems incredibly stupid to me that they would stick their necks out like that......................its possible, I suppose, that they genuinely did not realise you were on a tracker, or they genuinely thought they had something else that would be in your best interests. Why do I feel like I have to stretch my mind to believe that one?

Its normal for one to get a cooling off period, but this situation might be different as its not new business, as such. Also, given that nobody will give tracker mortgages anymore they could refuse to revert to the original agreement as technically that product does not exist anymore. I am just speculating here though...............................

dotsman

Well, with regards offering fixed rates, it is impossible to say for definite that it is in anyone's favour. Yes, at the moment (and in my opinion - always!), it is ridiculous to leave a tracker for a fixed. But, one cannot say for definite (99% chance - yes, 100% - no) what the rates will be like next year, so they can sell it to you on that principle (that it might be in your favour). It is the same as insurance - you pay extra now, in the event that if something bad happens (ie rates rocket over the net few years), you are covered. It's just that the extra you will pay, the chance of rates surpassing current fixed rates over the next few years, the cost to you should that happens, leaves this a very expensive insurance!

That said, fixing it for 10 years is very different. You can be guaranteed that whatever rates are going at the moment, they will definitely increase again over the next 10 years (and probably come down again and go up again). There are some people who wouldn't mind that peace of mind. And 10 year fixed rates are considerably cheap. 5.75% isn't very different from what the OP was paying just a month ago.

IsThatSo?

So its about personal perspective and attitude to risk, as it always is when making a choice on whether to go fixed or variable. I wouldn't be too hasty in letting a tracker go just yet myself. As the ads say "T&C apply, interest rates can go up or down, your home is at risk if you do not keep up repayments" its always rushed in at the end

I see your point about the insurance, a valid one. In that instance, yes, you are betting against future circumstances.

Surely though, the responsibility that the bank has to give their customers accurate advice that is suitable for that particular customers needs, applys to the here and now rather than what might happen in a years time?

dotsman

IsThatSo? wrote: »

Surely though, the responsibility that the bank has to give their customers accurate advice that is suitable for that particular customers needs, applys to the here and now rather than what might happen in a years time?

Actually, the responsibility of any Financial advisor is to take into account the short, medium and long term interests of the customer. For example, imagine if it was the other way around and the bank was advising customers to go for variable rather than Fixed (say a 5 or ten year fixed). Then 2 or 3 years later, after having a nice low repayment, interest rates go through the roof (over 10%), you'd have a lot of customers going off to Joe (Financial Ombudsman) trying to complain that they were "tricked" into going for a variable, when "they really wanted to fix at circa 5.5%".

As I said, it's like insurance - statistically, the odds are in the banks favour (just like any insurance is statistically in the insurers favour - that is how they make a profit), but there are a lot of people who can afford circa 5.5%, love the current circa 4% that trackers are giving them, but would not be able to pay if rates were to were to go through the roof in a few years time, and therefore are willing to pay that bit extra now to ensure that eventuality never occurs

Don't get me wrong - I'll be keeping my tracker for the foreseeable future:D! But, if I see the European economy recovering and interest rates starting to climb again any time soon, I might consider fixing (however, as soon as that happens, the banks will, of course, increase the rate of their fixed rate offerings:(.

All I'm saying is that I don't see First Active's approach necessarily as being very underhanded (trying to push a 1 or 2 year fixed is, however, is bad advise!).

rameire

to be honest with you, it was more than likely a branch local to yourself, and they were just trying to drum up business for themselves by ringing customers, and more than likely didnt realise you were on a tracker, prob just thought you were on a standard variable, so nothing sinister, just trying to push figures up.

IsThatSo?

dotsman wrote: »

Actually, the responsibility of any Financial advisor is to take into account the short, medium and long term interests of the customer.

Yes, based on the information they have now, not what might happen in a years time.

dotsman

IsThatSo? wrote: »

Yes, based on the information they have now, not what might happen in a years time.

Actually any investment advice is based on both "the information they have now" and "what might happen in a years time". It is extremely irresponsible to advise a certain product based solely on the now, and is the reason why many people end up in disputes with their banks/brokers etc, and many more customers lose out on potential savings/gains. Should I advise someone to purchase shares in a company based on the fact that the share price is doing well at the moment? Whould I advise someone to lock themselves into a 5-year investment when there's a chance, however small, that they will need this money before then? Should I advise someone to take a variable/tracker mortgage, if they are unable to afford repayments should rates go above 6% any time in the next 5/10 years?

The problem with the information we have now is that we don't have a lot right now! Mortgages, for the regular joe, are high value, long term commitments. Therefore, any Financial Advisor, worthy of this title, will advise their client of the short medium and long-term benefits and risks. They can strongly advise one path or two paths etc, the same that they can strongly advise against another path, but ultimately the choice is down to the customer.

And this is what happenend in the Ops case. They offered him a Fixed rate. He is implying that they tried to trick him into this. I am merely saying that they contacted him, offered him a viable product, he said no, and they left it at that. I just don't see anything underhanded about it. I remember watching one of those Future Shock programs on RTE when interest rates first started to rise. There was some girl on it who was devasted that her repayments were rising and she could no longer afford her mortgage. This was when the ECB rates had reached something like 3% and growing. Firstly, she probably shouldn't have been given a mortgage anyway!, but if so, then she should have been strongly advised to fix at the time even though it would cost more in the short term.

In the OP's specific case, the information they have now is that interests rates are low, they are going to get lower and then they are going to get higher. Nobody knows when, nor does anybody know how low/high they will go. And therefore, if you can afford the 5/10 year fixed rate now, it is a viable financial product.

Again, going back to my earlier comment, I'm sticking with my own tracker as well!. I'm just saying that Fixed rates aren't exactly a bad thing and that there was no harm done in merely offering it to you.

No1XtinaFan

Actually, IIB did this also to all their Tracker custmomers so I'm pretty confident they knew you were on a tracker.

As the rates are coming down, it's in the banks interest to get you off the tracker as you are guaranteed your rate to be reduced in line with ECB however if your on standard variable they are not obliged to pass this reduction on to you and obviously in the current market no one will want to come off a tracker for a variable hence them offereing 'attractive' (I'd say they offered you a 2yr fixed) Fixed rates that will in turn roll on to the standard variable at the end of the fixed period.

As far as I know, IIB nipped this in the bud as soon as the clients started contacting their brokers who in turn started contacting the Financial Regulator. It's not best practice and I don't think the regulator is too happy about it.

bipedalhumanoid

These guys are seriously dodgy. I've called First Active on a number of occasions to find out whether we will be moving to a tracker mortgage when our fixed period ends next month. They constantly insist that we won't be and that we'll be going onto the standard variable rate.

I dug out the original literature and loan offer which clearly says ECB + 1.15% but then thought maybe I've been screwed on the actual contract. They did it to us on our fixed term. We only agreed to 2 years but on the mortgage contract they actually signed us into 2yrs and 9 months.

Anyway, I called the solicitor today to check and he confirmed that the contract definitley says I'm to go onto a tracker.

These guys are going to do all they can to can to screw me out of my tracker mortgage. After the fiasco with the fixed period they can go to hell!

On another note, does anyone know if there is a collar on the First Active tracker? Anyone know what the current rate is? I can't find any information on it and First Active themselves won't tell me what it is they keep insisting I'm moving to a variable rate.