14:23 PM, 25th June 2014, About 7 years ago 8
The West Bromwich Building Society has admitted to overcharging customers upon redemption of their mortgage account.
The long running historic error meant that when a mortgage was redeemed interest was charged up to the end of the month and not to the date the loan was repaid. Of the 7,699 affected customers most took out loans directly with the West Brom between 2004 and 2007, although there are some prior to this date taken out with their specialist loans department West Bromwich Mortgage Company.
Depending on the day of the month the mortgage was redeemed customers will be refunded up to a maximum of one months interest with an additional 8% interest added to this amount.
West Brom confirmed that all affected customers have been contacted and have put aside £2 million to rectify this error.
Jonathan Westhoff, CEO of West Brom said, “overcharges have stemmed from a historic error originating some 10 years ago, which we uncovered while investigating a recent service enquiry. We sincerely apologise to those people who have been charged incorrectly and are responding swiftly to restore them to their original position.”
Refunds will be issued directly into customers accounts within the next two weeks.
This news comes on top of a representative legal action case against West Bromwich Mortgage Company which is due to be heard in the Commercial Court later this year . The costs of funding the dispute was raised by a group of 231 Landlords who are members of the Property118.com online landlords community who are affected directly by a hike in the margin charged on West Brom tracker rate buy to let mortgages. The building society CEO John Westhoff has admitted that the rate hike was only applied to buy to let mortgages which were sold via intermediaries and only if the borrower owns three or more properties, regardless of whether the properties were purchased before or after the affected mortgages with West Brom were arranged and regardless of how many of the properties are mortgaged to West Brom (linked article)
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