Should AIB compensate me for upsetting letter on arrears?

Q&A: Dominic Coyle answers your personal finance questions

AIB upset customer ahead of Christmas with letter that inadvertently exaggerated mortgage arrears. Photograph: Cathal McNaughton/Reuters

AIB upset customer ahead of Christmas with letter that inadvertently exaggerated mortgage arrears. Photograph: Cathal McNaughton/Reuters

 

I am in arrears with AIB on my mortgage to the equivalent of 2½ months.

However, on correspondence dated December 23rd last, which arrived on December 24th, AIB said this was 25 months. The timing of this incorrect information from AIB upset my Christmas as the bank was uncontactable on the issue.

Should AIB offer some monetary gesture? I have written to them and await response. Mr MK, email

This column has been as harsh a critic of the banks and their treatment of customers over the years as anyone else – particularly when it comes to inexcusable mismanagement of people’s borrowings or in putting unhelpful and unwarranted pressure on already stressed customers in arrears.

As a general rule, where there is a scintilla of doubt as to whether people are entitled to recompense or compensation in matters such as the tracker mortgage scandal, I have advised readers that they should at least follow the process and make the bank explain why that should not be the case – or concede that there is a case.

But that does not mean that every customer is entitled to compensation in every instance.

On the basis of your letter, it is quite clear that AIB did make an error in the letter they sent you. And, unsurprisingly – it being Christmas Eve – the chances of getting someone to answer a query and confirm that it was just an error and nothing more sinister were slim to none.

I’m conscious that debt – especially unplanned debt – has a way of putting people on edge. However, you appear to have been well aware of your financial position regarding the mortgage, that you were a couple of months behind in your payments.

And, for most of us, we could easily confirm this by logging into our bank’s online service and checking recent statements for incomings and outgoings – even over Christmas when banks would not be physically contactable. If not, there should be a record of payments in monthly printed bank statements. That should have been more than enough to put one’s mind at ease.

I’m assuming anyone who was more than two years behind in mortgage payments would be very aware of the severity of the position. And, in any case, if you were over two years in arrears, there is no chance that this would have been the first communication on the issue.

So, any reasonable person in the position you found yourself would quickly realise that this was indeed a simple clerical error – a missing decimal place – rather than any deliberate attempt to frighten, harass or distress you. If it were me, I might be annoyed at the bank’s incompetence but no more concerned about my debt that I would anyway be if I found myself a couple of months behind in my home loan payments.

I presume that the bank acknowledged its error as soon as you were able to contact it after the Christmas break.

Should AIB offer “some monetary gesture”? In my opinion, no. You have not suffered any financial loss in this episode. But what they should do is confirm the error in writing and apologise for it. After all, the original error is in writing and on its files. Make sure you get something in writing from the bank confirming the true position and – I would hope – apologising for the initial mistake.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.

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