MSE News: Mortgages hikes after Yorkshire/Clydesdale Bank glitch

Wendy0224

CKW1 wrote: »

I've just come across this thread and am amazed that CB are trying to claw back monies which have not been paid as a result of their error! I work for a mortgage lender and know that in cases where an error has been made we always ensure that the customer is put in the position they would have been had the error not occured and i'm surprised that CB have not taken the same action as I believe this is what the FSA would expect them to do!

My understanding of this matter is that those of you affected are on repayment mortgages and that when the base rate reduced they didn't calculate the repayments correctly. I note that a few of you have quoted that this was an error going back to 2008 but the base rate did continue to reduce in 2009 were the payments not recalculated then? or was there a rate floor which stopped the rate reducing when the base reached a certain level?

When the rate was reducing presumably Clydesdale sent you a letter advising of the new rate and new monthly payment. If the monthly payment they quoted on their letter is the same as the amount they have been collecting by direct debit I do not believe they can request overpayments to make up the shortfall. As a customer you cannot be expected to check their figures, particularly on repayment mortgages where the calculation is more complex than interest only. In my opinion Clydesdale should be adjusting your balances to the level they should be had the correct amount been paid over this period and writing off any interest they've lost as a result. Now that the error has been picked up they are within their rights to increase the monthly payment to what it should have been, providing sufficient notice of an increase has been provided to you under the terms of their direct debit guarantee & mortgage conditions of course!

Thanks for your posting, which I found really helpful.

Our situation was similar to most postings - we hold 3 buy-to -let repayment tracker mortgages over 15 yrs. Tracking the Bank of England rate @ 0.79% over base. My posting on this is number 60. We too received the letter stating that we had underpayed due to an inaccuracy in the way our repayments were calculated

Here are my figures:

Jan 08 interest rate 6.29% mthly payments = £ 589.05
feb 08 6.04% = £ 576.46
May 08 5.79% = £ 563.99
Nov 08 3.79% = £ 540.57
Dec 08 2.79% = £ 468.35
Jan 09 2.29% = £ 422.02
feb 09 1.79% = £ 398.21
Mar 09 1.29% = £ 374.53


As you rightly point out, we cannot possibly check that the calculations were correct - as the repayments are very complex on capital repayment mortgages.

Each time the BOE base rate dropped, we were indeed notified of these new repayments on our mortgages by letter, and the direct debit was adjusted accordingly.

According to the Clydesdale detailed reconstruction of my accounts, the miscalculations started in Nov 2008 and continued every month getting larger and larger every time the BOE base rate dropped - right up until the date of my letter from them on 28 May 2010!

The Clydesdale propose that our balance on each property now stands at £50952.97

They have told us that our 'underpayments' totalled £12864.14 per property instead of £14324.84. This means our shortfall on the capital is £1460.70 per property!

The interest charged was £4279.19. The correct interest should have been £4267.40. They have refunded the £11.79 difference.

So the bottom line is our capital repayment now stands at a staggering £ 4,2974.52 extra over the the 3 properties due to their error!

Would we have a case for 100% compensation on the mistake and claiming for the balances to be adjusted and reset to £49480.47 and writing off the £1472.50 & interest?

At the moment they have offered us £250 which we think is insulting.

Have there been any similar cases that the FSA have awarded in the favour of the customer?

Any advice much appreciated.

Wendy
South Yorkshire

opinions4u

Wendy0224 wrote: »

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)

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

I'd double check that the FOS will accept complaints for commercial transactions like Buy-to-Let.

I don't think they do.

Dollydebs_2

Another update folks!

I am quite simply livid (mostly with myself) I am in work and just received a phone call from another person from CB (I presume one of these so called mortgage managers).

He just stated that the bank were prepared to place £500 into my mortgage account and thats it - I said well actually I need to speak with my husband about this and I will call you tomorrow. He said, oh I'm not in tomorrow give me his mobile and I will call him - erm no matey I dont think so!! I said he doesnt have his mobile with him and he wouldnt get a signal in his work (What I wanted to say was how is it appropriate for you to call him? like I dont have the casting vote so to speak. I mean, does he think that even if he spoke to my husband he wouldnt tell him the same thing? as in we need to discuss further)...fuming with the cheek of it all, he's lucky he got me in work!

Anyway, thats my update another offer up from £250 just 3 days ago. I also said to him so if I was to accept the £500 what would my payments be now and he said oh they will be £415 per month (incidentally payments just now are £309) and I said noooo thats what they will be for paying back the increase of payments to the correct amount plus the total shortfall of £1700, surely the new shortfall would be £1200 thus the amount per month would be less than that, even minimally - "erm erm erm, yes well we would look into that" he said.

I am sick to the back teeth of this I feel I cant trust them at all. Opinions please, should I should accept defeat or fight on?

After that phone call I want to fight on....and on....and on....and on.....

Rgds
DD

HAL73

Dollydebs wrote: »

Another update folks!

I am quite simply livid (mostly with myself) I am in work and just received a phone call from another person from CB (I presume one of these so called mortgage managers).

He just stated that the bank were prepared to place £500 into my mortgage account and thats it - I said well actually I need to speak with my husband about this and I will call you tomorrow. He said, oh I'm not in tomorrow give me his mobile and I will call him - erm no matey I dont think so!! I said he doesnt have his mobile with him and he wouldnt get a signal in his work (What I wanted to say was how is it appropriate for you to call him? like I dont have the casting vote so to speak. I mean, does he think that even if he spoke to my husband he wouldnt tell him the same thing? as in we need to discuss further)...fuming with the cheek of it all, he's lucky he got me in work!

Anyway, thats my update another offer up from £250 just 3 days ago. I also said to him so if I was to accept the £500 what would my payments be now and he said oh they will be £415 per month (incidentally payments just now are £309) and I said noooo thats what they will be for paying back the increase of payments to the correct amount plus the total shortfall of £1700, surely the new shortfall would be £1200 thus the amount per month would be less than that, even minimally - "erm erm erm, yes well we would look into that" he said.

I am sick to the back teeth of this I feel I cant trust them at all. Opinions please, should I should accept defeat or fight on?

After that phone call I want to fight on....and on....and on....and on.....

Rgds
DD

Keep going, the more annoyed voices they hear the more inclined they might be to do something about it.

I formally registered my complaint today on the customer care line, to which they have said they will respond in writing, I also said I will not be accepting their findings until I have had time to seek independent professional advice on the calcultions and on they way they have communicated how they intend to increase my monthly repayments. If they think I have a spare £400 per month floating around gathering dust they can think again. Even if they have miscalculated for the last 2 years and their revised figures are correct, this is more about the principal of the situation. What other industry would 'misinform' their customers for 2 years and then place the entire financial burden on the customer without accepting any responsibility or absorbing some of the mistake ??....

birdsong247

Update - received the CB printout and terms - as clear as mud. Registered a formal complaint with CB and also registered with the FOS.

FOS also advised that CB will issue an update letters four weeks after a formal complaint is registered, which will advise a four week extension is required as they have been unable to resolve the complaint in the initial period.

As the start of the CB notification letters seem to be in late May/early June - those who complained at the beginning of June should be getting updates imminently.

birdsong247

HAL73 wrote: »

I formally registered my complaint today on the customer care line, to which they have said they will respond in writing ....

We got our compliant in writing detailed back to us by CB, taken from the telephone discussion - effectively they framed the complaint. We'll be writing back to clarify and detail the full extent of our complaint. The FOS confirmed that we will be adding to the original complaint not restarting it.

So scrutinise the letter you get from them - we'd expected a request for more detail on our gripe not to be told what we were griping about ! :mad:

birdsong247

Dollydebs wrote: »

(What I wanted to say was how is it appropriate for you to call him? like I dont have the casting vote so to speak. I mean, does he think that even if he spoke to my husband he wouldnt tell him the same thing? as in we need to discuss further)...fuming with the cheek of it all, he's lucky he got me in work!

If it's a joint mortgage - you are jointly and severally liable - so the CB should make any proposal in writing to both of you, not try and pull a fast one on the phone !

Wendy0224

opinions4u wrote: »

I'd double check that the FOS will accept complaints for commercial transactions like Buy-to-Let.

I don't think they do.

I didn't know that! - their web site is unclear, I still need to phone and check.
have you any idea who we should turn to for help? Who would be our ombudsman?
Thanks
Wendy
South Yorkshire

Thrugelmir

Wendy0224 wrote: »

I didn't know that! - their web site is unclear, I still need to phone and check.
have you any idea who we should turn to for help? Who would be our ombudsman?
Thanks
Wendy
South Yorkshire

Commercial lending with a loan value over £25k is unregulated.

Here's the link to the Banking Ombudsman which is your best hope.

http://www.financial-ombudsman.org.uk/faq/businesses/index.htm

luckyfool

Wendy0224 wrote: »

I didn't know that! - their web site is unclear, I still need to phone and check.
have you any idea who we should turn to for help? Who would be our ombudsman?
Thanks
Wendy
South Yorkshire

You don't have an ombudsman. Its not 100% that all buy to lets are not covered by the ombudsman (FOS). In certain circumstances they can be, but generally only if the occupants of the properties are related to you (i.e. the loan was regulated). Where it is not covered by the FOS you can go through the lenders own complaints procedure, beyond that your recourse is legal action, though it may not come to that.