The bank explained to the client in its reply to his complaint that he had sold his property and bought a condominium. His old property had been encumbered with a 10-year fixed-rate mortgage, which had continued to run for a good year beyond the date of the sale. With regard to this fixed-rate mortgage, it had been agreed to waive early termination in order to avoid an early repayment penalty. The fixed-rate mortgage had been transferred to the new condominium under the same conditions. When the mortgage contract was amended, the two digits of the interest rate were mistakenly interchanged, so that instead of the interest rate of 3.1% of the still current fixed-rate mortgage, a new, never agreed interest rate of 1.3% was listed. At the end of the year, the bank had discovered this during a check and corrected the error, which he was informed of immediately.
In his submission to the Ombudsman, the client did not say a word about the history and the negotiations that had led to the new mortgage contract. In a first step, the Ombudsman therefore asked him to comment on the bank’s statement of facts. In particular, he asked him to explain whether it was true that he had decided to transfer the existing fixed-rate mortgage with an interest rate of 3.1% to his new fixed-rate mortgage in order to avoid an early repayment penalty in connection with the sale of his old property. In addition, the Ombudsman asked him whether there had ever been any discussion about reducing the interest rate to 1.3% during the relevant negotiations.
The Ombudsman supplemented his questions with the following comments: It seemed to him that the digits of the interest rate before and after the decimal point had been interchanged when the contract was drafted, if the bank’s account of the history of the contract was correct. The Swiss Code of Obligations clearly stipulates when and within what period of time a contracting party has the right to come back to such an error. In the Ombudsman’s view, if the presumption was correct and the digits had indeed been switched in error, without there ever having been a prior agreement on such an interest rate reduction, the bank was perfectly entitled to revert to it in the form in which it had done so.
The customer then confirmed to the Ombudsman that the statement of facts was correct. He thanked the Ombudsman for his explanations and said that he would inform the bank that he accepted the retroactive correction.