Complaint Review: RAMS (Registered Australian Mortgage Securities)

This report is with regard to RAMS (Registered Australian Mortgage Securities) refusal to provide to me the 1 Year Fixed Interest Rate which is contrary to their advertisements and signed mortgage documents. This consititues two possible breaches under Australian Law:-

1. Trade Practices - Deceptive and Misleading Advertising
2. Contract Laws - explicit stipulation of term(s) and contravening agreement.

As a result of rising interest rates on 14th January 2000 I contacted RAMS to change my current Variable Rate Loan into a 1 Year Fixed Rate, as per RAMS advertising and the terms and conditions of my RAMS loan agreement. However, I was advised that the 1 Year Rate was no longer available and my only option was to lock into a high interest rate 3 or 5 Year Fixed Period. This was totally unacceptable as the rates were much higher than other lending bodies and 3 years was too long when interest rates my go down again.

As such, I demanded my 1 Year Fixed Rate entitlement as per my agreement, but to not avail. Despite two weeks of phone calls and discussions with numerous RAMS managers, they still bluntly refuse to change their position, quoting their "legal rights" to do this. Further they refuse to enter into any negotiations to come to an amicable or alternative arrangement.

As such I am left with no other course of action than to pursue the matter through bodies such as the Rip-Off Report. Please refer to my website at http://www.geocities.com/riprams for the full story and documents, however, the essential facts supporting my case against RAMS are:-

The Advertising
In 1997 I obtained from RAMS their Better Home Loan brochure that explicitly states:-
"you can have the interest rate fixed for 1,2,3, or 5 years".
It was this option that lead me to enter into the RAMS home loan contract.
This very same brochure continued to electronically advertised on the Internet at http://www.mymoney.com.au/rams/fixvar.htm until I lodged my complaint with RAMS

The Loan Indicative Terms
As recommended to me by a RAMS Loan Manager, in 1997 I took out a RAMS Better Home Loan, for $300,000. The Loan Approval Indicative Terms again explicitly states:-
"you may request RAMS to fix all or part of your loan for a period of 1,3, or 5 years".
It should be noted that this letter is signed by a RAMS Home Loan Manager.

The Loan Agreement
Yet again in the Loan Agreement it specifically makes mention of a fixed rate period:-
"Fixed Rate Period...which must be either 1,2,3 or 5 years".
RAMS are stating that this is only available if they agree to it, however, how can you agree to something which no longer exists ? Other critical clauses in this contract which RAMS chooses to ignore are my consumer rights to be advised of changes:-
"22 Consumer Credit Code applies to this agreement"
"31 Variations..We must notify you of any variation of any term of this agreement before it takes effect"

The Cost - $3,600 and Loss Of Opportunity
My RAMS Better Home Loan with its "Fixed Rate Option" is 0.6% PA more expensive than RAMS Basic Home Loan product which does not have this option. Given that RAMS refuse to provide the 1 year fixed rate, it means that I have been paying 0.6%PA on $300,000 for the last two years for nothing. The conservatively adds up to $3,600. In addition to this, interest rates continue to rise and I have lost the opportunity to secure a lower fixed interest rate.

Given the above facts I believe I have a strong case against RAMS and something which needs to be brought to all consumer attention.