Yorkshire Building Society Group (YBS) is to voluntarily refund all administration fees, plus interest, for customers in mortgage arrears since January 2009, following some being charged incorrectly.
Around 33,900 current and former customers will receive an average of £247 back in refunded fees bringing the total bill to £8.4 million.
YBS includes Yorkshire, Chelsea and Barnsley building societies, and Accord Mortgages – the group’s intermediary lender.
The Financial Conduct Authority (FCA), which regulates the financial industry, found that YBS’s procedures were not robust enough and raised concerns that some customers had been charged incorrectly.
An administration fee can only be charged when a mortgage account falls into arrears by two months or more but this was not the case with some of YBS’s customers who were in arrears.
YBS has decided to refund all customers, regardless of whether they were adversely affected or not. It has also published the details of the redress package on its website, which can also be found on the FCA’s website, and is the first organisation to take this step on a voluntary basis.
Clive Adamson, director of supervision, said: “The FCA has worked closely with Yorkshire Building Society to get to the heart of this issue and ensure that customers are refunded what they are owed. We have been encouraged that they are now putting customers first by paying redress to everybody in arrears, not just those who were overcharged.”
In a statement Yorkshire Building Society said: “To ensure customers do not face lengthy delays and uncertainty whilst we review all individual files, we have decided the fairest approach for our customers is to refund all arrears administration fees charged since January 2009, plus interest on those fees. This means some borrowers who were correctly charged will also receive a refund of arrears administration fees.”
YBS is writing to customers to apologise and explain what refund they will get so no action is required by current or former customers. Letters to customers and refunds will start on 25 February 2014.
