Yorkshire Bank and Clydesdale fined £8.9m for mortgage errors

YORKSHIRE Bank and its sister operation Clydesdale have been fined £8.9m by the Financial Conduct Authority (FCA) for miscalculating 42,500 mortgages.

The city watchdog found a number of the bank’s mortgage customers were required to increase their monthly repayments to make up the shortfall resulting from miscalculations.

Altogether, the cost of the fine and the compensation will total around £42m.

FCA’s Tracey McDermott said: “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.
“Clydesdale is today paying the price for its decision to put its bottom line ahead of the need to ensure its customers were treated fairly.”

Those affected will be paid an average £970 in compensation.

The bank’s chief executive David Thorburn, said the company was “very sorry” and admitted it had not handled the issue in the correct way.

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

Both operations are owned by National Australia Bank.