Yorkshire BS fined for borrower blunders
Financial regulator fines Yorkshire Building Society £4.1 million fine for poor treatment of some mortgage customers.
The Financial Conduct Authority (FCA) regulator has fined Yorkshire Building Society £4.1 million for its poor treatment of some mortgage borrowers who had been struggling with their repayments.
The fine is in addition to £8.4 million in compensation it is paying out to 39,400 borrowers who were hit with unnecessary fees and charges as a result of bad management of their mortgages.
What did Yorkshire do wrong?
According to the FCA, between October 2011 and July 2012 Yorkshire’s call handlers failed to help struggling borrowers identify the cause of their problems and their future financial prospects.
This failure meant a delay in working out the best payment solution, which subsequently led to increased fees and associated interest for the borrowers.
An investigation by the financial regulator highlighted insufficient training of call handling staff and fragmented guidance, meaning borrowers were not asked about their circumstances properly. As a result, working out some form of fair payment solution was far more difficult. The FCA also highlighted poor management processes at Yorkshire Building Society.
It ruled that thousands of borrowers were treated poorly, leading them to face far larger charges than necessary, when they were already having difficulty meeting their mortgage payments.
A review in May 2013 looked at 87 cases, and found that in 64 the borrower was not treated fairly. In 52 cases it was clear the borrower had suffered financially as a result.
[Related story: Banks launch one month free mortgage offer]
Yorkshire’s punishment
Yorkshire Building Society agreed, before the investigation by the FCA had even been concluded, to refund fees plus interest to all mortgage borrowers who had been charged since January 2009. Affected borrowers can expect average payments of around £247.
It has also stopped charging mortgage arrears fees until it has fixed the existing issues with handling struggling borrowers.
Are you due compensation?
Yorkshire began contacting borrowers in line for compensation back in February, so you shouldn’t need to do anything.
However, you can contact the Yorkshire Customer Relations team on 0800 923 0045 for more information.
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