Yorkshire Building Society

FCA action

fines

2

in fines

£5.56m

most recent

October 2014

• Fined £4.14m on 28 October 2014

  On 28 October 2014, for failings in its handling of mortgage customers in payment difficulties or arrears, the Financial Conduct Authority (FCA) imposed a financial penalty of £4,135,600 on Yorkshire Building Society (YBS). YBS breached Principles 6 (customer fairness) and 3 (systems and controls) and associated rules in the Mortgages and Home Finance: Conduct of Business sourcebook. YBS agreed to settle at an early stage and therefore qualified for a 30% (stage 1) discount under the FCA's executive settlement procedures. Were it not for this discount, the FCA would have imposed a financial penalty of £5,908,100. When dealing with mortgage customers suffering payment difficulties or whose accounts were in arrears, YBS failed to probe into customers' particular circumstances to determine the root cause of their difficulties and their future financial prospects. As a result, there were significant delays in determining appropriate payment solutions. This meant that some customers incurred increased fees and associated interest. Weaknesses in YBS's systems, and failures to identify customer complaints, meant that this unfair treatment of customers was not identified. YBS has voluntarily agreed to refund all mortgage arrears fees, plus associated interest, charged to customers since January 2009. The FCA's action took effect on 28 October 2014 and a copy of the Final Notice, which sets out the reason for the action, is displayed on the FCA's web site and can be accessed.

• Fined £1.43m on 18 June 2014

  On 16 June 2014 the FCA imposed a financial penalty of £1,429,000 on Yorkshire Building Society (YBS) for breaches of Principle 7 of the FCA's Principles for Businesses and related rules in the FCA's handbook. YBS agreed to settle at an early stage of the FCA's investigation. It therefore qualified for a 30% (Stage 1) discount under the FCA's executive settlement procedures. Were it not for this discount, the penalty would have been £2,041,500. The Cliquet Product was designed and issued by Credit Suisse International (CSI), but sold to retail investors through third party distributors, including YBS. Between 1 November 2009 and 17 June 2012 (the Relevant Period) YBS: i. Prepared and issued its own financial promotions for the Cliquet Product (the YBS Financial Promotions) which were not clear, fair and not misleading; and ii. Approved and provided to its customers Product Brochures (prepared and issued by CSI) which were not clear, fair and not misleading. The Cliquet Product was designed to provide capital protection and a guaranteed minimum return with the potential for more if the FTSE 100 Index performed consistently well. The potential for more was subject to a cap on the potential maximum return. The Product Brochures (throughout the Relevant Period) and the majority of the YBS Financial Promotions (until 24 September 2010) gave undue prominence to the potential maximum return. Although changes were made to the YBS Financial Promotions in 2010, they continued to give an unfair impression of the likelihood of achieving the maximum return even after this time. In addition, some of the YBS Financial Promotions did not clearly explain how returns were calculated and, until 18 January 2012, the explanations given in the Product Brochures about the early exit fee were not sufficiently clear. YBS and CSI have agreed to contact customers who bought issues of the Cliquet Product available during the Relevant Period, and offer them the opportunity to exit the product without penalty (where applicable) and interest up to that date based on a fixed term deposit rate.

Ombudsman complaints

new complaints, January–June 2025

70

upheld, against a 31% median

28%

about banking and credit

43

A bigger firm gets more complaints simply because it has more customers.