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Mortgage ‘calculation error’ leaves 18,000 customers with shortfall
Thousands of Yorkshire and Clydesdale mortgage customers have been left with a shortfall on their mortgage, after the bank miscalculated their monthly repayments.
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More FTSE charts & pricesby Victoria Bischoff on Jul 21, 2010 at 13:33
Follow @VBischoffA ‘calculation error’ by Yorkshire and Clydesdale Bank has left thousands of mortgage customers with a serious shortfall on their mortgage.
Yorkshire and Clydesdale Bank today said it is in the process of mailing around 18,000 variable rate mortgage customers to apologise for miscalculating their monthly repayments and to suggest ways customers can repay what they owe.
The bank said the calculating error, which was exacerbated by last year’s unprecedented falls in interest rates, led to the bank collecting less than the contractual minimum monthly payment required for customers to pay their mortgage within their agreed term.
This means customers affected will now have to pay both an increased monthly repayment to meet their contract’s requirements and an additional amount to cover the shortfall.
Around half of the customers who have been underpaying face an increase of less than £25 a month, but many could see increases of hundreds of pounds per month.
Steve Reid, retail director for Clydesdale and Yorkshire Banks, said: ‘We would like to reassure mortgage customers that they need take no action unless they have received a letter from us. The vast majority of our customers are not affected and, of those that are, 99% have already received their letter advising them of the specific impact on their account. The other 1% will hear from us in the next couple of weeks advising them of options to bring their account back on track’.
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5 comments so far. Why not have your say?
Philip
Jul 21, 2010 at 15:29
Typical - we make a mistake we pay they make a mistake we pay back to business as usual for the banks except that it has always been this way!!
report thisshaon mukherjee
Jul 21, 2010 at 16:49
nobs
report thisJoe Bloggs
Jul 21, 2010 at 18:55
You can take these people to the Financial Ombudsman, after complaining via the banks own procedure.
My bank did that, and they would not pay up the shortfall, offered me £48 , then the next stage another £100. The shortfall was £632, and I then went to ombudsman, and guess what, they coughed up the lot.
Do not let these people off the hook, after all it is what they are suppose to be good at, and after all it is their job to get it right.
Remember it will not cost you anything, yet have everything to gain.
Good Luck
report thisAnonymous 1 needed this 'off the record'
Jul 21, 2010 at 21:31
Of the 18,000 did no one spot the error - the maths aren't that complicated, our education must be very poor!
report thisGoing loco
Jul 21, 2010 at 22:58
I had a mortgage with a well-known Bank at the same time as I was a mature student studying Estate Management. I became an adept at compound interest calculations and gained a thorough understanding of mortgage repayment computation. I got a First in my degree and used my knowledge to point out to my bank that they were overcharging me for my mortgage. Of course they denied it, but eventually they had to accept that math is math and if the calculations are correctly performed the result must be correct.
I feel in my bones that many mortgagors are paying excessive amounts to their mortgagees, and if only the common man and woman knew how to do math they would find they are being right royally screwed. I would not be surprised if the average mortgage lender is populated by employees all the way up from the counter clerk to the managing director who are entirely unable to calculate a mortgage repayment from first principles, and that these lenders rely on their computer programmers to do it for them. I wonder how many computer programmers know how to do these calculations? I bet most of them use a function provided by the software supplier. It would not surprise me if the majority of the UK mortgage lending industry is using incorrect mathematics.
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