Yorkshire Building Society is to refund mortgage customers £8.4m in arrears charges after mistakes were made in charge calculations.
Almost 34,000 customers will receive redress across the group’s Yorkshire, Chelsea and Barnsley building society and Accord Mortgages brands.
Customers will each receive an average of £247, and the society will refund charges plus interest to all customers who have been charged arrears fees since January 2009, irrespective of whether a mistake has been made.
The issue came to light when the FCA questioned whether Yorkshire’s arrears charges procedures were robust enough.
The society then carried out its own review and found that since January 2009, when its most recent arrears guidance was introduced, some customers who were in arrears may have been incorrectly charged arrears administration fees.
The society has suspended all arrears fees and says it will not reintroduce them until it is “absolutely confident” its processes are robust enough.
It will send letters to the 33,900 affected customers from 25 February to outline the refund process.
In a statement, Yorkshire says: “Our customers are at the heart of everything we do, which is why we are taking proactive steps to reimburse those who may have been incorrectly charged arrears administration fees.
“To ensure customers do not face lengthy delays and uncertainty whilst we review all individual files, we have decided the fairest approach for our customers is to refund all arrears administration fees charged since January 2009, plus interest on those fees.”
FCA director of supervision Clive Adamson says: “The FCA has worked closely with Yorkshire Building Society to get to the heart of this issue and ensure that customers are refunded what they are owed. We have been encouraged that they are now putting customers first by paying redress to everybody in arrears, not just those who were overcharged.
“But this is nonetheless a very important reminder that firms must take responsibility for any wrongdoing and make sure their customers get a fair deal.”