Q&A

Exchange rates: Last week, on May 4th, I lodged a sterling cheque at my bank, not AIB. The rate on my receipt is 0.6872, whereas I found on checking a few days later that the rate for that day was 0.6756 a difference of nearly €10 on a 600 transaction. I can live with the loss but I just wonder does this mean that my bank is at the same shady behaviour as AIB? I will be taking the matter up with them also.

Mr R.McE., Kilkenny

Exchange rates are all in the news now and, without passing judgment about what happened at AIB, that is no bad thing. The truth is that the vast majority of us pay no heed to the rate we are given on any given day in the same way that we hardly look at our bank or credit card statements.

No-one is saying that people are queuing up out there to rip us off but it is simply good financial housekeeping to be aware of what we are paying and that we have not been overcharged, accidentally or otherwise.

Having said all that, I am not sure exactly what the situation was in your case. There is clearly a difference between the two rates you quote, but are you saying that the lower figure was the rate advertised in the bank on that given day as the relevant exchange rate for converting sterling cheques into euros?

If so, then you have clearly been given an unfair rate. While the bank can set its rate on any given day and can offer different rates for, say cash or cheques, or even for sums over and under a certain threshold, these must be available in the branch and must be applied to all transactions while they are in force.

You say that you only discovered the discrepancy a few days later, which makes me think that the lower rate to which you refer is the one that is printed in newspapers, like on the markets page of The Irish Times, on a daily basis. In that case, the bank is probably in the right in this case. The rate in the newspapers would be the Central Bank rate, a figure that is laid down every day at noon by the bank.

It is, if you like, the official rate, but ordinary high-street banks add to this a margin - their profit - in setting their in-house rates for that given day.

The sort of discrepancy you refer to sounds like it might be accounted for in this way. The banks would argue that while the official rate is simply the market value of one currency in another, they have staff, storage and security costs to factor into the equation when they are setting their rates.

Far be it from me to defend any of the Irish banks on the margins they have charged down the years for foreign exchange transactions - fully approved in general by the Director of Consumer Affairs - but once the rate they offer you is the rate set down by the branch for the day in question and falls within the margins approved by the Director of Consumer Affairs, you have no case.

Still, it's no harm checking. You never know, they may have made a mistake at the branch and if you don't ask, you are very unlikely ever to find out - that we do know from the AIB case.

EBS

I opened a share account in the EBS in 1987 and used the account regularly for a number of years with an average balance of about £100. I then left the account unused with only a few euros in it until September last year when I started using it again. My current balance is around €300.

I was reading recently about the possibility of the EBS being bought by a large European bank in the future and how it could mean a windfall for EBS members and I was wondering if there was any way I could find out if I would be entitled to a payout if they were bought, or if there is a minimum amount that I should keep in the account at all times to ensure that I would qualify for a payout.

Mr E.C., Dublin

This is the problem with windfalls. As soon as one institution looks at changing its mutual status, with consequent cash windfalls for members, members of all such institutions wonder about their own situation.

All I can tell you about EBS Building Society is that it is very strongly on the record about its lack of appetite for a change in status. So strong is its declared attachment to its status that it lobbied the Government hard not to frame the forthcoming Building Societies Bill in a way that would see it inevitably forced down the demutualisation route. This is the legislation that Irish Nationwide sought in order to facilitate its move from member-owned to public or privately-owned status.

One of the reasons it has taken so long to frame is that the Government has been struggling to word it in a way that allows one institution (Irish Nationwide) shed its mutual status while protecting another (EBS) from being forced down the same route.

Will the EBS change its mind? I can't tell you. All I can say is that you, the members, will be the people deciding that.

On the question of a large European bank buying the EBS in the future, I would suggest there is an element of fantasy there. Having spoken recently to executives at the building society, I am aware that they are in regular discussion with European banks but these are all mutuals - such as Rabobank. In other words, they are looking to develop in a way that protects their mutual status while widening their product offering and improving the way they do business.

If they were to merge with another mutual, it would be unlikely to lead to a windfall. You would simply become members of a different group.

However, on purely pragmatic grounds, there is no reason why you should not cover all eventualities. That means you should ensure you remain a member of the society. If and when EBS raises the bar on membership in the same way as Irish Nationwide has done (where it now takes 20,000 to open a member account), fine, but until then members like yourself need only have 127 euros in their account.

The fact that you had less in it for a period and that the account was left dormant for a while is irrelevant. That would only matter if EBS had changed the rules at that time. It didn't, which means you should be okay - always providing that your particular accounts grants you membership rights, which I imagine it does.

Mortgages

Who regulates mortgage brokers? I am trying to buy a house and have gone through a broker to minimise the hassle. I now seem to spend more of my time making sure they have not missed something than I would do if I had done the whole thing myself. It is deeply unsatisfactory but I am not sure to whom they are answerable.

Ms B.D., Dublin

It sounds like you have had a rough time. Buying a house is complicated and stressful enough without having to keep tabs on someone you have hired for their expertise. It's only fair to say that we don't get many complaints about mortgage brokers so the standard out there is obviously reasonably high.

However, if you do have a problem, check with the Irish Financial Services Regulatory Authority, which is responsible for regulating them. It has a lo-call number, 1890 777 777, and has just opened a drop-in centre on College Green in Dublin.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.