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Bank of Ireland blitzed ahead of ‘unfair’ tracker rate hike

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The embattled Bank of Ireland (BoI) has come under fresh attack for “unfairly” hiking the interest rates of thousands of borrowers on ‘tracker’ mortgages, despite a static base rate.

Consumer group Which? said the bank was potentially treating some 13,500 customers unfairly by utilising a clause in the contracts’ small print to up borrowers’ rates.

In March, BoI borrowers were told that, from 1 May, their tracker mortgage rates would rise steeply, even though ‘trackers’ are supposed to remain in line with the Bank of England base rate, albeit with a percentage added on top.

The BoE base rate has remained at 0.5% for more than four years.

Which? executive director Richard Lloyd said: “Burying such important changes in the small print is wholly unfair. Bank of Ireland is taking advantage of its customers by hiking rates at a time when the base rate is static.

“Customers should complain if they were led to believe they had bought a ‘lifetime’ mortgage and Bank of Ireland must deal with these complaints quickly and fairly.

“The Financial Conduct Authority [the new financial services regulator] must make sure all banks communicate important clauses to their mortgage customers, and the government must ensure that the Consumer Rights Bill offers greater protection from unfair terms and conditions.”

The BoI has previously said it is hiking its rates as it is required to increase its capital reserves to stave off the threat of insolvency.

The fallout from the BoI’s decision to increase rates spread to the regulator, at the time the Financial Services Authority (FSA).

In March, Andrew Tyrie, chairman of the Treasury Committee, accused the FSA of “falling short” in its efforts to call to account the Bank for raising the interest rates.