Mortgage brokers have slammed Clydesdale Bank’s attempts to “shift the blame” onto borrowers after its error in calculating mortgage rates.
In April 2009 the bank realised mortgage rates were being wrongly calculated whenever there was an interest rate change. The error affected 42,000 customers and created a £21.2m shortfall.
In September 2009 it corrected the mistake and began writing to customers to inform them how they may have been affected.
Clydesdale ignored Financial Ombudsman Service guidance to write off customer shortfalls. Around 600 complaints were referred to the FOS about Clydesdale’s mortgage errors, most of which were upheld.
The FCA criticised the bank for not making it clear to customers that they were not to blame and had “no option” but to increase payments.
The bank has apologised and now faces total costs of £42m for the FCA fine, redress scheme and writing off the capital shortfall.
Trinity Communications director Aaron Strutt says: “Clydesdale just wanted its money back and did not give enough care to customers. It just changed customers’ direct debits and said ‘get on with it’, which is not the right way to deal with it. There are better ways of dealing with customers when you make a mistake.”
Highclere Financial Services partner Alan Lakey says: “This fine is a big slap for Clydesdale and a public put down. The bank’s knee-jerk reaction when it uncovered its failings was to shift the blame, and ultimately the cost, onto borrowers.”
London & Country associate director of communications David Hollingworth says: “The error was Clydesdale’s fault but it tried to shift the blame onto customers and make them pay. It is not the error itself but the way it just threw the blame on to borrowers that is the problem. It is only now trying to rectify this.”