MSE News: Mortgages hikes after Yorkshire/Clydesdale Bank glitch

opinions4u

gp11971 wrote: »

With regard to complaints, is it best to exhaust the CB system before going to the FOS, or go straight to the FOS. Any advice welcome.

The FOS will not take a case on if:

- a letter of deadlock has not been issued by the company or

- 8 weeks have not passed from the date of the original complaint

clydesfail

New to the forum - wife and I have just received a similar letter proposing an increase in repayments of almost 50% from August - how is anyone supposed to budget for that? Ludicrous.

Spoke to someone from the bank (the Head of Lending who wrote to us "wasn't available" - surprise), similar tale of incompetence on their part, apparently the "calculator wasn't working" (!!!???) (had they tried putting the batteries in the other way?)
So, have asked for a breakdown of the figures - the whole thing just feels odd. Underpayment due to a software error is one thing - but an extra 300 quid a month for 18 years to make up a shortfall of £4,000??? Please tell me I am missing something....?

I then rang the Financial Ombudsman Service, the guy I talked to was very helpful - would certainly recommend a call. He suggested kicking off proceedings right away which is what we have done with an initial letter of complaint, via the FOS, that is winging its way to Clydesdale Bank. I asked whether we should wait for the breakdown of figures before doing this - his view was that whatever those figures show there has clearly been an almighty series of errors on Clydesdale's part and I will be wanting compensation at the very least. They now have the standard 8 weeks to respond.
Saw that a few years ago a not too disimilar thing happened to Halifax/Leeds - can't post link, but google halifax uncovers mortgage error bbc.


they wrote off the outstanding amounts....than again look what happened to HBOS!


and also note that Yorkshire Bank customers seem to be affected - google yorkshire bank mortgage calculation error.

mortgagequestions

clydesfail wrote: »

but an extra 300 quid a month for 18 years to make up a shortfall of £4,000??? Please tell me I am missing something....?

I think your position is similar to mine. Of the additional £300 about £260 or so per month will just be bringing your payments up to the 'right' level (i.e. the level which you would have been paying had they not made an error). I think that is probably harder to complain about. The remaining £40 per month I think is where the dispute is since that represents the capital shortfall and the interest they are asking you to pay on that. Does that make sense?

opinions4u

clydesfail wrote: »

Saw that a few years ago a not too disimilar thing happened to Halifax/Leeds - can't post link, but google halifax uncovers mortgage error bbc.

Here's the link. It affected about 2% of accounts and they pro-actively put they matter right, ensuring no customer lost out. The amounts involved (speaking corporately) were tiny.

"At the same time we are waiving all underpayments. This is our problem, not our customers."

Personally I think Cyldesdale / Yorkshire should do the same.

than again look what happened to HBOS!

That was nothing to do with their residential mortgage lending though.

hants34

I thought I would post my progress report as I am grateful for the advice I have received and info provided on this thread.

I contacted Clydesdale bank via Customer care team 0800 2321322 and advised I had received the letter explaining an error had occurred which the advisor brought up on his screen. I requested that no changes are made to my Direct debit until the issue has been sorted to my satisfaction, they agreed to this. I asked for a full breakdown statement of payments that I should have been paying so that I can see precisely when errors occurred, they agreed to this. I asked for a full written explaination as to how the error occured, they tended to dodge this request, but I kept repeating my request until it was agreed to. I asked if the error would affect my credit rating due to reduced payments and was advised that it would not affect my credit rating as no payments had been missed, only reduced payment amounts had occurred for which they are accepting responsibility. I advised that I was aware that the error had affected a number of CB customers, this seemed to make the chap a little uneasy, I then requested 100% compensation for their error to the same sum as is the debt (Currently £1971.89) the chap said he did not have the authority to agree to this and stated that it was very doubtful I would acheive this amount. I then advised I would be willing to accept 75% of the amount in line with what other customers had received, again this made him uneasy which I believe is because they like to think customers are nieve and are not in touch with other customers. Whilst he couldn't confirm that I would recieve this, he was more positive. He advised that my call would be treated as a complaint and dealt with accordingly. (I also emailed CB complaints dept a few days earlier but as yet have not received a reply or acknowledgement of my email). Credit where it's due, the CB customer services chap Neil that I spoke to was pleasant and helpful. Will post up any info/news good or bad as I get it. Again thanks to those who have guided myself and others on this thread or posted info about what they have done. Martin

Marchbank

Hi,

Got the dreaded letter last week advising me payments would go up £300 a month to make up the shortfall. They have said my account will have a refund of £55 for the incorrect higher mortgage balance i have paid caused by the underpayments. Simmilar to others i have had a mortgage with them for two and a half years took a discount tracker at the time .49% above BOE base rate total 5.9%. Then reverting to 1% above BOE base rate i have obviously enjoyed the lower rates which is helping me pay off credit cards used for new bathroom and a rewire. I still took the risk on the mortgage, someone already mentioned the patronising (you are getting a very good deal) approach from some CB staff with regard trackers. No doubt they would be telling me i have the peace of mind each month to know payments if i jumped into a fivre year fixed at around 5% as some colleagues had.


I haven't spoken to them yet but will send a letter tomorrow with the usual request for explanation and statement breakdown etc. I also phoned the FOS on Friday where the female was willing to send a letter off immediately. It was fairly obvious she had heard simmilar from others and i wonder how many people are out there. I said to her i would go through the CB route first but would no doubt be back in touch. The reason i phoned was that i wanted them to log it which she did name and address was all required and she gave me a reference no. Although they are not acting for me yet they will have the open contacts in the system. I work for a utility company in complaints and we would record these contacts in the same way. When running reports hopefully they will log them against Cldesdale which may show a trend to add some clout.

Opinions4u it was interesting to see the Halifax previous outcomes where they settled hopefully could be seen as a test case for this scenario. Finally do you think there is any benefit in asking FOI requests, i assume it is a bit stricter when it comes to peoples accounts but do you think they are obliged to tell how many people are affected.

Thanks everyone for their advice.

HAL73

Hi all

Another livid Clydesdale customer here, I have received 'the letter' casually informing me that my monthly repayments will increase from £670 to £1074 as of Sept, a massive £400 hike ! Absolutely no way I am going to just accept this, completely unreasonable to put this type of financial burden on a customer. So far I have registered my complaint with the banks customer care line, I have set up a case file with the ombudsman but will pursue the bank direct before I use this avenue. I have received the breakdown of the revised figures which I still don't trust, it's designed to confuse the untrained eye. Final straw will be to contact the media, in the current climate this type of story will be lapped up by Watchdog.
We have financially planned the next 12 months around what we thought would be our mortgage repayments even with a contingency for interest rate rises but there is no way we could have forseen this level of increase, my partner has just started 9 months of maternity leave so this really puts us in a spot and is causing a huge ammount of stress at a time when we should be enjoying life.

I'll be challenging the bank over the next few days to see how they respond before taking action elsewhere. Please keep posting your updates there must be something that can be done.

stealeruk

Just out of curiousity, how much did everyones mortgage payments drop by when they implemented the new software?

HAL73

stealeruk wrote: »

Just out of curiousity, how much did everyones mortgage payments drop by when they implemented the new software?

I switched my mortgage to them on Oct 07, they claim the faulty calculations started in Feb 08, but there is no dramatic drop in the repayment amounts at this point, so the reductions have occurred in line with BOE interest rates cuts (which are all confirmed in writing by the bank at the time) therefore there was no reason to be alerted by anything 'unusual'......with a tracker mortage at 0.1% above base rate if your mortgage repayments are reducing at the same time as the drop in interest rates you would trust a bank to calculate it correctly but seemingly not anymore ! With my account there is also an offset amount to factor in over the entire period which adds to the confusion. I'm going to seek professional advice on the calculations they have sent me, as I can't believe in just over 2 years I have underpaid by £6700 and I now have a £400 increase in my monthly repayments for the next 22 years to cover it ! (and this will only get higher as interest rates increase)

Wendy0224

Thanks to everyone for all their postings on this subject. It has really galvinised our resolve to seek full compensation for their error.

We have received the same letters from the Clydesdale Bank for our 3 buy-to-let repayment tracker mortgages. (each at 0.79% over Bank of England Base Rate - taken out over 15yrs)

The letter required a extra payment of £100 per property per month to repay capital, over and above the current rate set by them of £353.25. per property, per month.

We complained immediately to customer services stating that miscalculation had been entirely their error, and asked for a full breakdown & explanation. We asked for our accounts to be held at the current rate until our investigations were complete. They agreed to this.

A full breakdown duly arrived, along with the offer of £250 compensation.

We intend to reject this offer and proceed to the Financial Ombudsman for 100% of the miscalculated capital shortfall - £1460.69 per property.

We do not undertake this lightly, but we are so appalled by the Clydesdale Bank for this monumental mistake, which has clearly been replicated throughout the UK.

Good luck everyone - We will keep you posted.
Wendy
South Yorkshire