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.”