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FCA fines Yorkshire BS £4.1m for mortgage arrears failings

The FCA has fined Yorkshire Building Society £4.1m for failings in the way it treated mortgage customers experiencing payment difficulties.

Between 1 October 2011 and 31 July 2012, insufficient training meant call handlers at Yorkshire Building Society failed to identify promptly the cause of borrowers’ problems.

These failures led to significant delays in determining the most appropriate payment solutions. 

Yorkshire Building Society properly viewed repossession as a last resort but failed to recognise that delays in reaching long-term payment solutions meant that some customers incurred increased fees and interest.

The mutual has already started to refund these customers. 

FCA director of enforcement and financial crime Tracey McDermott says: “Customers in financial difficulty need to be treated fairly and sensitively. Firms must ensure that they are taking into account the particular circumstances affecting customers who find themselves in difficulty. 

“Firms need to be dealing with these customers proactively, without delays, in order to ensure they are not losing out.

“By allowing cases to drift without agreement, Yorkshire Building Society’s actions meant that customers in vulnerable circumstances risked falling into further financial difficulty.”

The FCA says Yorkshire Building Society failed to spot the failings because of weaknesses in checking procedures and management information, and a failure to identify customer complaints.

This meant that management was deprived of information that may have highlighted poor treatment of customers.

In September and October 2012, the FSA wrote to the mutual highlighting serious failings in the monitoring and oversight of cases discovered during a previous visit.

The FCA ordered a skilled person review in May 2013 which found that in 64 out of 87 cases, customers were not treated fairly and in 52 of these cases customer detriment could be identified.

Yorkshire Building Society agreed prior to the enforcement investigation to refund all mortgage arrears fees, plus associated interest, charged to customers since January 2009.

The redress scheme is currently underway and approximately 33,900 customers will be repaid a total of £8.4m.

Yorkshire Building Society agreed to settle at an early stage of the investigation and therefore qualified for a 30 per cent discount.

Yorkshire Building Society chief executive Chris Pilling says: “As a mutual organisation owned by our members, the service we give to customers is fundamental to us and we are very sorry for letting them down.

“I hope the refunds we have voluntarily given to customers and the changes we have made demonstrate how seriously we have taken this issue and our commitment to put things right.

“We believe the improvements and investment we have made in this part of our business will deliver the level of service our members expect of us and our focus on achieving that is absolute.”

In June, the FCA fined Yorkshire Building Society and Credit Suisse International a total of £3.8m for failings relating to financial promotions. 


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There is one comment at the moment, we would love to hear your opinion too.

  1. Shocking – two fines from the regulator in one year for poor customer outcomes.

    And this is the firm that has come first every year for the last three years in the Treating Customers Fairly Awards presented by another major industry publication. Says something about industry awards, doesn’t it?

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