Yorkshire Building Society, Chelsea Building Society, Barnsley Building Society and Accord Mortgages to refund arrears administration fees charged since 2009 and interest on those fees. Find out what this means for their mortgage customers.
We raised concerns with Yorkshire Building Society Group (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.
YBS can charge an arrears administration fee when a mortgage account falls into arrears by two months or more. This fee covers the administrative costs in dealing with the arrears.
However, YBS found that some of its customers who were in arrears may incorrectly have been charged arrears administration fees since January 2009.
YBS is now taking proactive steps to reimburse customers who were incorrectly charged, and will refund all arrears administration fees charged since January 2009 and interest on those fees.
This means that some borrowers who were correctly charged arrears administration fees will also receive a refund.
The total amount to be refunded is expected to be about £8.4m, with customers receiving an average of £247.
What will happen next
YBS will send out letters to approximately 33,900 current and former customers to apologise for the situation, outline the refund process and explain how much each customer will receive.
The first letters will be sent to customers on 25 February 2014.
What you should do next
You do not have to do anything.
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.
Most customers who no longer have a mortgage with Yorkshire, Chelsea or Barnsley building societies, 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, once YBS is satisfied it has their current address.
However, if you are a former customer but you still owe money on your mortgage the refund will be used to reduce the amount owed.
Further information
If you want further information about the refund of mortgage arrears administration fees you can call the YBS Customer Relations team on 0800 9230045 or 01242 874 998 between 9am and 5pm, Monday to Friday.