Yorkshire Building Society fined £4m for mortgage failings

YORKSHIRE Building Society (YBS) has been fined £4m for failings when dealing with its mortgage customers experiencing payment difficulties.

The Financial Conduct Authority (FCA) says that 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.

According to the FCA, 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, the regulator said.

The 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.

YBS has already started to refund these customers. A redress scheme is currently underway and around 33,900 customers will be repaid a total of £8.4m.

Tracey McDermott, FCA director of enforcement and financial crime, said: “Customers in financial difficulty need to be treated fairly and sensitively. 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.”

Chis Pilling, Yorkshire Building Society chief executive, said: “As a mutual organisation owned by our members, the service we give to customers is fundamental to us and we are very sorry for letting them down.

“I hope the refunds we have voluntarily given to customers and the changes we have made demonstrate how seriously we have taken this issue and our commitment to put things right.

“We believe the improvements and investment we have made in this part of our business will deliver the level of service our members expect of us and our focus on achieving that is absolute.”