Mail gremlins hit Standard Life payout

Having read your recent articles in The Irish Times relating to Standard Life's return of value payment, I would appreciate your advice. I chose the capital option on the payment election form sent to me. I made sure to return the completed form in the envelope sent to me by the company well in advance of the March 18th deadline – approximately 10 days in advance.

I have today received my return of value payment cheque and I note that it is defined as payment type – income.

I am quite perturbed at this as the cheque is quite substantial and I am conscious that I will lose a significant amount in income tax as a result. My reason for choosing the capital option was because I have accrued tax credits on previous share losses.

I have telephoned the registrars Capita and have been told offhand that they did not receive the form (which was sent in their own printed envelope). I asked to speak to a manager, as the person I was speaking to said nothing could be done about it now. I was then told that as no manager was available, I would receive a call back in 48 hours. Following protest I was told someone will contact me in 24 hours ?

Mr MA, email

It's like groundhog day. For Vodafone and Computershare, we now read Standard Life and Capita.

You say you sent your preference for the Standard Life return of value a full 10 days in advance of the deadline in their own envelope. They say they did not receive it in time. There is no reason why mail between Ireland and the UK should take such time. As someone who mails the UK (and receives mail from the UK) regularly, I cannot remember the last time it took more than two or three days – and certainly never more than a week.

Computershare previously took me through their mail process in painstaking detail and I am sure Capita could do the same. The fact remains that something is fundamentally wrong with the process because a 10-day mailing for a corporate prepaid printed envelope is nonsense.

Having said that, and bearing in mind the significance of the sum you mention, it is beyond me why shareholders are leaving themselves open to ransom by the vagaries of “snail mail” when a relatively straightforward online option was available to all shareholders.

Still, enough of the past. What now?

Capita’s inability to get a manager to address a reasonable shareholder query on their helpline is disgraceful in my view. This is a major shareholder exercise and I would expect much more than simple call centre first line of interaction service – not least because Capita will be fully aware of the Vodafone/Computershare debacle.

I personally don’t think Standard Life did enough to alert shareholders to the importance of this exercise – at least in Ireland. These groups forget that shareholders tire of endless bulky annual reports and the like and, foolishly, often disengage just as important material like this drops through their doors. Yes, it is the fault of the shareholders, but companies boasting shareholder registers replete with small-scale, unsophisticated shareholders (often former members of the same entities when they were mutuals) in my view have a responsibility to be a little bit more proactive.

In terms of reassurance, the Irish Government recognised the chaos of the Vodafone exercise in the last budget when allowance was made effectively to treat return of value for small shareholders as capital regardless to how it was paid out by the company.

If Standard Life proves as problematic, I would not be surprised if the same happened again. Revenue is in the business of collecting tax due, but not in pursuing people who have inadvertently been deprived of perfectly legal tax-saving measures, despite their best efforts. Move my mortgage if AIB is being sold? I currently have a mortgage with AIB of about €130,000 on an apartment. The term is for 30 years and I am now in year 10 of the term. During this time I have always paid promptly each month and I am not in arrears. I have heard the Government is trying to sell AIB and I am concerned that if this should happen my mortgage might be taken over by another banking institution who might increase my variable interest rate which is currently 4.15 per cent. What do you think is likely to happen and would it be worth my while approaching, say, Bank of Ireland who, I understand, are not being sold off by the Government, for a mortgage switch. Do you think they wold be interested in doing business with me? My salary is €40,000 per annum. I also have savings of €45,000 but I am reluctant to spend this as I will never be able to save it up again as I am at the pin of my collar paying my bills each month.

Ms CG, email

Financial institutions are always quick to demand that you notify them of any change in circumstances but, unfortunately, they are not always as quick to reassure customers about changes on their part that may affect them until it is too late to do much about it.

Still, I think your alarm might be a little bit unnecessary. I am aware that a large number of Irish mortgage-holders have found their loans moving to the ownership of groups that are not strictly regulated under current Irish law in the same way as a bank might be. Clearly, that has been an issue of concern to those homeowners.

However, that involved the sale of tranches of loans held by Nama linked to insolvent banks. This is not the same thing at all. The Government is looking to sell down its stake in AIB in a manner yet to be determined. However, it is not envisaged that AIB would not retain its banking licence or that it would somehow fall outside the current regulatory structure.

Your mortgage would be covered in precisely the same way it is now. And the sort of pressure the Government is looking to apply to lenders on lowering their variable rate mortgage rates and profit margins through the Central Bank will continue to be the case. AIB, which is not offering the lowest variable rate, is certainly not the most expensive in the market. If memory serves, its rate is slightly lower than that of Bank of Ireland.

For its part, Bank of Ireland is owned by a group of shareholders that the Government might wish for AIB, and, as with any other company, these shares have been bought and sold over recent years without undermining the bank or the position of its mortgage-holders.

However, if, for this or any reason you were looking to switch mortgage-holder, that is open to you. You would probably face additional costs on the legal side in making that switch, but there is no reason why they would not consider you. It would be based on your record with the mortgage to date, which sounds spotless, and your ability to pay. That seems to fall within the updated Central Bank rules on mortgage lending, which set a limit of 3.5 times gross income. Those rules also set a general limit of 70 per cent loan to value. You don’t mention market value of your home but that would be a consideration.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St, D2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.