£4m fine for the Yorkshire

Published on

Yorkshire Building Society

The Financial Conduct Authority has fined Yorkshire Building Society (YBS) £4,135,600 for failings when dealing with its mortgage customers experiencing payment difficulties.

Between 1 October 2011 and 31 July 2012, call handlers at YBS, dealing with customers in payment difficulties, failed to deal properly with these customers in order to identify promptly the cause of their problems and their future financial prospects.

These failures led to significant delays in determining the most appropriate payment solutions. YBS properly viewed repossession as a last resort but failed to recognise that delays in reaching long term payment solutions meant that some customers incurred increased fees and associated interest. YBS has already started to refund these customers.

“Customers in financial difficulty need to be treated fairly and sensitively,” explained Tracey McDermott, FCA director of enforcement and financial crime. “Firms must ensure that they are taking into account the particular circumstances affecting customers who find themselves in difficulty. Firms need to be dealing with these customers proactively, without delays, in order to ensure they are not losing out.

“By allowing cases to drift without agreement, YBS’s actions meant that customers in vulnerable circumstances risked falling into further financial difficulty.”

The regulator’s investigation found that insufficient training and fragmented guidance meant that call handlers did not consistently probe customers’ circumstances and identify the cause of their problems.

These issues were not spotted because weaknesses in checking procedures and management information, and a failure to identify customer complaints, meant that YBS management was deprived of information that may have highlighted poor treatment of customers.

In September and October 2012, the FSA wrote to YBS highlighting serious failings in the monitoring and oversight of cases discovered during a previous visit. The FCA ordered a Skilled Person review in May 2013 which found that in 64 out of 87 cases considered, customers were not treated fairly and in 52 of these cases customer detriment could be identified.

YBS agreed, voluntarily and proactively, prior to the enforcement investigation commencing to refund all mortgage arrears fees, plus associated interest, charged to customers since January 2009. The redress scheme is currently underway and approximately 33,900 customers will be repaid a total of £8.4 million.

YBS agreed to settle at an early stage of the FCA investigation and therefore qualified for a 30% (stage 1) discount.

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

South drives first annual asking house price fall since 2024

Asking prices for homes in Great Britain have slipped into annual decline for the...

Rents fall as inflationary pressures mount

Tenants are beginning to feel some respite as rents across Great Britain fall at...

Bank of England set to hold rates as inflation proves sticky

The Bank of England is expected to hold interest rates at 4% this week...

Mortgage pros stride for mental health on Thames Bridges Trek

Mortgage industry pros from Crystal Specialist Finance, Market Financial Solutions, Movin Legal, MT Finance, United...

UK house price growth downgraded amid pre-Budget nerves

The UK housing market is expected to see slower price growth this year and...

Latest publication

Other news

We need clearer guidance on Stamp Duty advice

Just over a week ago Angela Rayner resigned following the discovery of a Stamp...

Getting to know you: Saul Conway, AS Financial

Name: Saul Conway Age: 45 Location: London Qualification Year: 2003 Firm: AS Financial Specialty: Financial Services Entrepreneur Education: Honours Degree...

South drives first annual asking house price fall since 2024

Asking prices for homes in Great Britain have slipped into annual decline for the...