Consumer Focus has called on the FSA to take enforcement action against Clydesdale and Yorkshire Banks unless they stop pursuing customers for shortfalls relating to miscalculated mortgage repayments.
Last July, Clydesdale and Yorkshire Banks, both part of National Australia Bank, apologised to 18,000 of their variable and tracker mortgage customers for failing to correctly calculate interest payments, meaning the repayments were set too low.
However, the banks still sought to recoup the shortfalls by increasing customers’ mortgage payments.
Consumer Focus, a statutory organ- isation formed when Energywatch, Postwatch and the National Consumer Council were combined, has written to the banks calling for them to stop pursuing the borrowers.
It has also written to the FSA to urge it to take action. An FSA spokeswoman says the regulator “will reply in due course”.
The Financial Ombudsman Service indicated in the August/September edition of Ombudsman News that where a bank is found to blame for the error, then it should write off the shortfall.
But the banks remain defiant and say they will continue trying to recoup the money. A Clydesdale and York- shire spokesman says: “This is not a new issue and our position remains unchanged. It is disappointing that the conclusions reached by Consumer Focus do not reflect the information we have provided them.
“The vast majority accepted they were simply being asked to pay back the amount they had originally agreed to when taking out their mortgage.”
Mortgage broker Emba group sales and marketing director Mike Fitzgerald says: “The board should acc- ept it was their fault and share the pain by reducing the amount owed.”