Banks say sorry for repayment calculation error

26 July 2010 | By Sam Dale

Yorkshire and Clydesdale banks were forced to apologise to 18,000 of their variable rate customers last week after an error meant they were underpaying on their mortgages.

After miscalculating monthly payments some customers were paying less than the minimum, so many now have shortfalls on their mortgages and are not on course to pay off their loans within the agreed term.

The banks claim they have corrected the error and written to affected customers to apologise and suggest ways to return their accounts to the position they would have been in had this not occurred.

Steve Reid, retail director at Clydesdale Bank, says: “First and foremost, we are sorry this error has happened, and for any inconvenience it may have caused borrowers who are affected. We would like to reassure these mortgage customers that they do not have to take any action unless they have received a letter from us.

“The vast majority of our customers are not affected by this, and of those who are, 99% have already received a letter advising them of the effect on their account. The other 1% will hear from us in the next couple of weeks, advising them of options to get their accounts back on track.”

The recalculated regular payments that are suggested to customers in their letters reflect their correct monthly payments plus an amount intended to eliminate any shortfalls caused by the underpayments.

For around half the customers who have been underpaying the total suggested increase is less than £25 per month, including around £2 to cover the repayment shortfall.

The banks are also providing other flexible options, with each customer’s case being reviewed individually so their overall financial circumstances can be taken into account and the most appropriate solution found.

 

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