First Trust Bank denies £200 overdraft to former AIB customer
Q&A: Dominic Coyle
Although AIB Bank and First Trust are part of the same banking group, they are regulated in different jurisdiction
About this time last year I moved to Northern Ireland after being offered a job with a company I had been working for in Dublin. They were expanding in the North, so I jumped at the chance.
I decided to bank with First Trust as I had an AIB account in Ireland. I recently applied for a £200 overdraft which I would pay off within two months. This was refused. The reason given is I had not been banking with them for more than a year.
I am still paying off a personal loan in Ireland with AIB which stands at €9,000. I have never missed a payment on this and pay it off monthly through my First Trust account.
I am a bit annoyed about this. Surely, as AIB is their parent company, they can see my history and regular payments etc. I was even offered a €3,000 loan when I was moving.
So what are the consequences of moving my banking to another UK bank and just stopping payment of my loan in Ireland? I have no intention of moving back to Ireland.
Mr AP, Belfast.
Starting at the end of the story, so to speak, I would urge you not to stop payment on your Irish loan.
I can certainly understand why you would be a little miffed at your experience with First Trust, and we’ll come to that in a second, but simply abandoning your loan here can only damage you in the long run.
You say you have no intention of returning to Ireland but there really is no way of knowing this. You moved North a year ago only because your current employer was providing opportunities there. That indicates you’re settled with that company.
If economic circumstances – Brexit or anything else – meant they had to retrench in the North, you could well find yourself back in the Republic in order to stay with your current job. Or the job could disappear in other circumstances and you might have difficulty finding another in the North and be tempted back home.
Either way, deliberately creating a bad credit record for yourself when you have the financial means to meet your debts simply due to pique is ill advised.
Having said that, there’s no reason you need to stay with First Trust. You moved there believing that being part of the same group as your current bank – AIB – would mean minimal disruption of your banking business. However, as far as First Trust s concerned, you are getting zero recognition for your time with AIB.
On that basis, you’re getting no benefit from the arrangement whereas First Trust has got your business – and any profit that goes with it.
If you really want to lash out and make your annoyance clear, why not move your banking arrangements to one of the other banks operating in Northern Ireland? Losing your business is about the only censure your have on First Trust.
And there’s nothing to stop you paying your outstanding AIB loan from a different bank.
In any case, assuming you are happy to follow through on such a move, you can approach your bank and say this is your intention on the basis of their failure to recognise your past banking record with the parent group. It might prompt a rethink.
Getting back to the nuts and bolts: although AIB Bank and First Trust are part of the same banking group, they are regulated in different jurisdictions and it may be that First Trust would be precluded from giving you credit for your banking record in the Republic when determining your application for an overdraft.
And they may have a one-year rule before considering any credit, though I think that is rather petty. After all, they are getting free use of any balance you have.
I would be astonished if there were no communications between the related banks in the case of major banking customers, so I cannot see why it is not there as a matter of course given the inevitable mobility of labour across the invisible Border.
Bottom line here is that we are talking about a £200 overdraft for a period of two months. It’s peanuts. And regardless of the one-year rule – which is ridiculous anyway – I cannot see why any bank would jeopardise a long-term relationship with a new customer over such a small issue.
In any case, they can see how you handle debt even in the short time they have had you as a customer by looking at your repayment record on the outstanding AIB loan.
I’m not sure I’d have any interest in building a business relationship with any financial institution that small-minded. You should approach them to make your displeasure clear, remind them of your longer-term relationship with the banking group and its importance in your initial decision to bank with them, ask them to reconsider and, depending on the outcome, decide whether you’re interested in staying with FirstTrust/AIB or not.