Clydesdale Bank and Yorkshire Bank have responded to today’s announcement from the FCA regarding failings in calcuating mortgage repayments, indicating that the cost of redress could reach £42 million.
Although the error had existed since 2005, they bank claim that it had little impact on customers before 2008 as interest rates moved up and down. The total cost of providing customer redress, including the £8.9 million fine imposed by the FCA, is expected to be approximately £42 million, of which the vast majority had already been provided for by the end of June 2013.
Where their error resulted in a capital shortfall on a customer mortgage, the Bank will write off the entire shortfall, make a payment representing interest costs and recalculate the reduced payment amount where appropriate. The average shortfall to be written off is £970. In total, there was a £21.2 million shortfall in customer mortgages.
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