Complaints upheld against Clydesdale and Yorkshire bank mortgage underpayments


Mortgage arrears wiped off by FOS for innocent bank customers.

The Financial Ombudsman has found in favour of customers who complained about having to pay back mortgage arrears to their bank.

Complaints made to the Financial Ombudsman Service by customers of the Clydesdale and Yorkshire Bank, who were sent letters to pay back their mortgage arrears after being undercharged for months through no fault of their own, have been upheld.

A miscalculation made by the two lenders, owned by National Australia Bank, had meant that the monthly repayments of almost 18,000 customers had been too small. Letters were sent out to those affected in July, which outlined the problem and demanded payment of the arrears in either a lump sum or in monthly repayments split across the remainder of the repayment period.

The repayment figures ranged from £25 to £75 per customer. Some outraged customers complained and have had their underpayments wiped off. They said that the banks should have to shoulder the burden of their own mistakes rather than demanding payment from innocent mortgage holders.

A spokesman for the Yorkshire bank said: “Some borrowers complained to us and some have gone to the Ombudsman. It has found in their favour in some instances and we are going along with that”.

He added, however, that “there are instances where the ombudsman has found in favour of the decision we have made”.

“The vast majority [of customers] have accepted it was a genuine mistake and their payments are changing to reflect that”.

However, Ray Boulger of John Charcol, the mortgage broker, said: “Now that a precedent has been set by the ombudsman it is difficult to believe Clydesdale will still insist on pushing people to repay. Customers have had a windfall due to Clydesdale’s failure to calculate payments accurately. They will now have to pay the proper amounts, but, for those who claim, their capital outstanding will be lower once the repayment has been knocked off”.