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FSA urged to take action on Clydesdale and Yorkshire Banks

Consumer Focus has called on the FSA to take enforcement action on Clydesdale and Yorkshire Banks unless they stop pursuing customers for shortfalls relating to miscalculated repayments.

In July last year, Clydesdale and Yorkshire Banks revealed they had inaccurately calculated interest rates for 18,000 of its variable and tracker mortgage holders, meaning the minimum repayments were set too low.

The banks apologised but still sought to recoup the shortfalls by increasing payments.

Consumer Focus is a statutory organisation formed from three organisations – energywatch, Postwatch and the National Consumer Council – and aims to provide a voice for consumers.

The Financial Ombudsman Service indicated that customers should not be held responsible for these types of errors.

Consumer Focus has also written to the banks calling on it to stop pursuing the affected customers.

Consumer Focus chief executive Mike O’Connor says: “Clydesdale and Yorkshire Banks 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. They 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.”

A Clydesdale 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.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. This is madness that Consumer Focus Chief Executive is demanding that Clydesdale stop asking for shortfalls on miscalculated payments. Would its answer change if the payments were caclulated wrongly the other way? Of course not, they would demand repayment immediately. An honest mistake is an honest mistake, whether it is the bank or the customer.

  2. Excellent comments Lewis and I 100% agree!

    As long as the Clydedale and Yorkshire are flexible in providing an appropriate timescale for the payments they are due, I can’t see the problem.

  3. Sorry Gents, you are both wrong. Its simple. The customer would not expect to have the knowledge and technology to work this out. Even though they could if they actively sought it. But they would only do that if they thought they were being overcharged. IIt seems to me that the Bank asked the customer to pay XYZ as per their contract. The customer does therefore fullfuling their contractual obligations. The bank on the other hand forms the contract.and if their is an avoidable tort it is the Bank who would be at fault. I am sick and tired of people in your industry talking about the customers who you rely on for your inflated living standards being trashed at very turn by a load of pompous insurance salesman. .

  4. Michael Greenwood 4th March 2011 at 3:31 pm

    I’m sorry but I think you’re both missing the point here. The Chief Executive of Customer Focus has demanded that both providers and especially Clydesdale respect the decision made by the Financial Ombudsman.

    “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.”

    Banks and Building Societies already have little or no respect for treating customers fairly and to allow them to ignore decisions made by the FOS, right or wrong will ultimately prove detrimental to the credibility of the industry.

  5. Gerry, it is the insurance salesmen the clients call first when things go wrong. Not the bank

  6. Gentle people, this is the ombudsman who shall not be ignored, the IFA has to abide by decisions (right or wrong) or lose his / her livelihood with no right of appeal.
    Using the arguments (both sides above) should it therefore follow that no tax payer should have to pay the billions of pounds back to HMRC for their miscalculations? Or that those who overpaid should not get that money back? Or if the car salesman, lawyer, or local council tax officer miscalculated your final bill you should not pay the extra to put things right? Have a great weekend.
    Gerry I am an insurance salesman, now called IFA’s and or Brokers, who spends around 10% of my life sorting out bank sales made to people who come and look to me for help and support, climb down off your soap box and get the TRUE facts on the oppression of the IFA PROFESSION

  7. Hi All, i was one of the 18,000 people who had this happen, it took me nearly 12 months to sort this out and the fact the financial ombudsman service had to get involved in the end before they admitted defeat.

    But i managed to get the whole 2.5k dropped i would strongly advise the other 17,999 to keep up the fight and know your rights!!

    If like me you have your original letter showing your new rates from them they don’t have a leg to stand on.

  8. I think the point has been missed totally. If you were told by the judge you needed to go to prison for 5 years for a crime then run away and hid for 5 years would you still need to go to prison or would you be deemed to have paid your dues!
    If the Banks have been told not to charge by the FOS and they still do anyway against the ruling this is a two fingered salute to the whole regulatory industry and undermines its very reason for being there.
    People and companies should not be allowed to break the rules however unjust they thing they are or how untouchable a company they think they are.
    I for one am sick to death of the big boys manipulation of things to fit for them and them only and treading all over the “weaker” and “smaller” guys like the small broker.
    If this sort of behavior happened in any other industry people would be sent to jail period!

  9. I am an ex employee of one of these operations and can imagine the error was genuine.

    That said however Banks are behaving with no regards to anyone but themselves and it does not surprise me that they ignore the Ombudsman.

    The tax payers are keeping the banking industry afloat whilst it revives itself so they can and will do what they like.

  10. I work in the building society sector. The precedent from the Ombudsman is quite clear. If the customer has paid what they were asked to pay, regardless of whether that was the right amount, the lender cannot go back to the customer to make up the shortfall. Some of the arguments put forward, such as the reference to HMRC are well made and just go to prove that the mortgage industry is everybody’s whipping boy, with a set of rules for us, that don’t apply in other walks of life.

  11. Mr. Jogga SinghTeidy BA (Hons) RGN Cert.Ed CMAP 5th March 2011 at 12:44 am

    I agree with Lewis, the first comment. If the customer had overpaid, would we not expect the bank to recredit the overpayments to the customers account? Of course we would.

    This blind, sort of advocacy is a nonsense and earn no one any respect, it confuses our sense of right and wrong, these consumer focus folks sound as if they re overpaid, with not much to do, and have to mke an issue, when there is no issue. I think the FSA sold investigate them for having warped sense of TCF and wether there is any capacity for this group to serve anyones interest in an ethical manner?

    This sounds more political nonsense than sound ethical decsion making.

  12. To Michael @ 5.12

    I think you will find that this sort of ruling does apply on other walks of life. If you were to buy a TV from a retailer and they subsequently found that they had sold it at a price far lower than they should have, they can’t recover any further monies from you to make up the shortfall.

    However if you are overcharged for the TV you can go back and get the difference refunded.

    Its all about consumer protection and ensuring that those providing a service have to do so competently, as mistakes will cost them not the consumer.

  13. We have a number of clients with Yorkshire Bank who are experiencing problems of unfair treatment. It extends beyond the mortgage issues in the article.

    The FSA should be investigating them on wider issues than this.

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