Clydesdale Bank must pay an £8.9 million fine for failing to tell borrowers customers their rights after miscalculating the repayments on more than 42,500 mortgages.
Clydesdale has agreed with banking regulator the Financial Conduct Authority (FCA) to compensate everyone who underpaid their mortgages.
In April 2009 Clydesdale uncovered an error in mortgage repayment calculations for borrowers with variable rate mortgages.
The mistake led to the bank collecting incorrect repayments on the 42,500 mortgage accounts.
About 22,000 accounts had shortfalls because borrowers had not paid enough to clear their mortgages by the end of the term. The calculation was corrected in 2010.
Borrowers unfairly treated
These 22,000 customers were then asked to pay more each month to correct the error and to make up for their shortfalls.
The bank was trying to clear a £21.2 million gap between what was collected and what borrowers should have paid. The shortfalls ranged from less than £20 to more than £18,000, with an average of £970.
“After uncovering the mistake, Clydesdale got in touch with borrowers and set up a dedicated call centre to deal with inquiries,” said a FCA spokesman. “But in chasing repayment from borrowers as a priority, the bank tried to balance commercial interests against the need to treat borrowers fairly.
Broker fined £14 million for LIBOR manipulation
The FCA also fined ICAP Europe Limited (IEL) £14 million for misconduct relating to the London Interbank Offered Rate (LIBOR).
IEL is the first broking firm to be fined for LIBOR failings – some banks have picked up fines from regulators in the UK and US.
The fines relate to two brokers colluding with traders at Swiss bank UBS to
Manipulate the Japanese Yen LIBOR rate for the benefit of the traders by deliberately sending incorrect LIBOR data to banks they believed would set for a particular day asking banks to make specific Japanese Yen LIBOR submissions
Pay corrupt bonus payments to a broker for helping to manipulate the Japanese Yen LIBOR rates.
Warnings about bogus advisers
The FCA has also issued two warnings about bogus firms posing as regulated financial advisers:
- Project Finance Bank
- Hayes Capital Management
- Hamilton International Group
- ApplianceFix Ltd
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
