Member Article

Yorkshire Building Society fined £4.1 million by the FCA

Yorkshire Building Society has been fined a total of £4,135,600 by the Financial Conduct Authority for failing in its dealings with customers who had fallen behind with mortgage payments.

In particular, the regulator found that the society had been too slow to reach deals with struggling customers.

As a result, some of those customers had incurred extra fees and interest.

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 reportedly 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.

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.”

In February, the mortgage lender agreed to refund almost 34,000 customers at a cost of £8.4 million, after the FCA probe.

Chris 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.”

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This was posted in Bdaily's Members' News section by Clare Burnett .