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Yorkshire BS to refund 33,900 customers after arrears error
The Yorkshire Building Society group is to refund 33,900 of its customers after the FCA questioned whether the interest charged to those in arrears was correct.
Since January 2009 the lender had incorrectly charged some customers arrears administration fees and will now refund all such fees to all customers, plus any interest accrued.
The lender is expected to refund £8.4m in total with each affected customer typically receiving £247.
The group contains the Yorkshire, Chelsea and Barnsley building societies and intermediary-only brand Accord Mortgages.
While not all accounts had been unfairly charged the lender said it would refund all customers to avoid any ‘lengthy delays or uncertainty’ that would be caused by a case-by-case investigation.
Mortgage customers affected will be sent a letter next week apologising for any error and stating how much will be refunded. This refund will appear as credit on their next mortgage account statement.
Customers who no longer have a mortgage with the group will receive a cheque for the total arrears fees charged in the past five years.
A statement from the lender said: “We found that, in the period since January 2009, some of our customers who were in arrears may have been incorrectly charged administration fees.
“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.
“This means some borrowers who were correctly charged will also receive a refund of arrears administration fees.”
Clive Adamson, director of supervision at the FCA, said: “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.”
