Clydesdale and Yorkshire Banks should be subjected to enforcement action by FSA for pursuing customers on account of shortfalls due to the bank’s own miscalculation of repayments, said Consumer Focus.
Clydesdale and Yorkshire Banks had announced last July that due to miscalculation of 18,000 variable and tracker rate mortgage holders, it had erroneously set the minimum repayment amounts too low.
The banks made a public apology for the error and proposed to recoup the loss by hiking the repayment amount.
Three organisations – the National Consumer Council, energywatch and Postwatch came together to form the statutory advocacy group Consumer Focus.
The Financial Ombudsman Service had said that customers should not be held responsible for such mistakes. Consumer Focus had earlier written to banks to stop pursuing customers for additional payments.
“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” said Mike O’Connor – chief executive of Consumer Focus..
“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”, he added.
“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”, said a Clydesdale Bank spokeswoman.