Over 30,000 Yorkshire Building Society customers to be refunded mortgage arrears fees

Yorkshire Building Society Group (YBS) will voluntarily refund all administration fees for mortgage arrears since January 2009.

The decision was made after the Financial Conduct Authority (FCA) raised concerns that some YBS customers had been charged incorrectly as a consequence of its procedures not being robust enough.

The total bill is expected to reach £8.4m with approximately 33,900 current and former customers receiving an average of £247 back in refunded fees.

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.

"But this is nonetheless a very important reminder that firms must take responsibility for any wrongdoing and make sure their customers get a fair deal."

YBS has agreed to publish the details of the redress package on its website which can also be found on the FCA’s website. YBS is the first organisation to take this step on a voluntary basis.

The FCA raised concerns with YBS, which includes Yorkshire, Chelsea and Barnsley building societies, and Accord Mortgages, about their processes for dealing with mortgage customers who had fallen behind in their payments.

Firms can only charge customers whose accounts have fallen into arrears by two months or more fees that cover their administration costs in relation to arrears management. YBS found that some of its customers in arrears may have been charged fees incorrectly.

To ensure people do not face lengthy delays and uncertainty in getting redress, YBS has agreed to refund all arrears administration fees charged since January 2009, plus interest on those fees. This means that borrowers who were charged correctly will also receive a refund.

The refund process including letters to customers with details of the exercise will commence on 25 February 2014, and redress will start to be paid from this date.

Notes for editors

  1. Customers will be contacted proactively, there is no action required by current or former customers.
  2. Existing customers will have their mortgage account credited on 25 February 2014 with an amount that includes all arrears administration fees charged since January 2009, plus interest on those fees. The refund will appear as a credit on their next mortgage account statement.
  3. Most former customers who no longer have a mortgage with Yorkshire Building Society, Chelsea Building Society, Barnsley Building Society or Accord Mortgages will receive a cheque for the total cost of all arrears administration fees charged since January 2009, plus interest on those fees.
  4. Any customers who want further information about the refund of mortgage arrears administration fees can call the YBS Customer Relations team on 0800 9230045 or 01242 874 998 between 9am and 5pm, Monday to Friday.
  5. On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  7. Find out more information about the FCA.