Clydesdale Bank Fined Over Mortgage Blunder

Written By Unknown on Kamis, 26 September 2013 | 18.55

The Clydesdale Bank has been fined almost £9m by the City regulator for failing to treat customers fairly after miscalculating repayments on 42,500 mortgages.

The Financial Conduct Authority (FCA) said the lender, owned by National Australia Bank, forced more than half of those customers into higher payments to rectify the error - suggesting they had no alternative but to pay up.

The blunder, which was discovered in April 2009, affected how Clydesdale had calculated variable rate mortgage repayments.

As a result, incorrect repayments were made on over 42,500 customer accounts and 22,000 were left with shortfalls - as high as £18,000 - and immediate demands from the bank for repayment, the FCA said.

Clydesdale was found to have wrongly sought to balance its own commercial interests against the requirement to treat customers fairly.

David Thorburn, chief executive of the Clydesdale Bank said: "I am very sorry that this wasn't handled as it should have been.

"We should have made it clear at the time that this was entirely our fault and that some customers may be entitled to compensation.

"Our priority is to fix this for customers as quickly as possible and they will each receive a letter explaining how we will make this right for them.

"In addition, an automatic compensation process for customers who underpaid as a result of our error is in place to provide immediate resolution for over 14,000 customer accounts.

"Those customers will receive a full apology and confirmation of their refund within the next 48 hours."

Tracey McDermott, the FCA's director of enforcement and financial crime said of the fine: "For most people mortgage payments are their biggest monthly outgoing and we all budget on the assumption that the information our mortgage lender gives us about what we need to pay is correct.

"Here Clydesdale failed in that basic duty and, when it discovered the problem, sought to pass all of the consequences on to its customers - expecting them to find the money to remedy mistakes which were entirely of Clydesdale's making."


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