Clydesdale and Yorkshire Bank mortgage row

Consumer Focus is urging the FSA to take action against Clydesdale and Yorkshire banks unless they stop pursuing customers after mortgage errors.

clydesdale bankThe FSA has been asked by Consumer Focus to take enforcement action against Clydesdale and Yorkshire banks  unless they stop pursuing customers after a mortgage error.

Clydesdale is pursuing shortfalls that arose after it mis-calculated interest rates on some of its variable and tracker mortgages. This comes after guidance from the Financial Ombudsman Service (FOS) that customers in this position should see their shortfall written off.

In July 2010, the bank revealed they had inaccurately calculated interest rates for 18,000 of its tracker and variable mortgage holders, meaning the minimum repayments were set too low. The cost of the error is estimated to be at least £10 million.

The bank apologised, but still sought to recoup the shortfalls by increasing payments by up to £3,500.

The Financial Ombudsman Service indicated that customers should not be held responsible for these types of errors and feels the issue affects Clydesdale customers in particular.

Mike O’Connor Consumer Focus chief executive says: “Clydesdale Bank must now stand up and do the right thing for anyone who has been asked to make up shortfalls caused through no fault of their own. It should give up attempts to recover this money and certainly refund any customer who paid after the clarification by the Financial Ombudsman.

“We would expect any bank that wants a reputation for treating customers fairly to repay everyone who was caught out by the bank’s own mistake.”

In response, a Clydesdale and Yorkshire Bank spokesman says: “Our position remains unchanged. It is disappointing the conclusions reached by Consumer Focus do not reflect the information we provided them.

“We apologised in July to those customers affected. The vast majority accepted they were simply being asked to pay back the amount they’d originally agreed to when taking out their mortgage.

“Our priority has been to be fair to all customers in the way we dealt with this and we have considered each case on its individual merits; offering a range of flexible payment options.”

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