West Bromwich Building Society admit to overcharging mortgage interest on 7,699 customers

by Property 118

4 years ago

West Bromwich Building Society admit to overcharging mortgage interest on 7,699 customers

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West Bromwich Building Society admit to overcharging mortgage interest on 7,699 customers

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) 

Comments

Neil Patterson

4 years ago

At least their Complaints, PR and Legal departments are being kept busy.

Arthur Online

4 years ago

Good that they've admitted and are redressing their error!

Kevin Thomson

4 years ago

'which we uncovered while investigating a recent service enquiry.'.....

This is not true.

I wrote to them on this matter in 2008 when a mortgage was being redeemed. I pointed out then how unfair their policy was but they took no notice.

Neil Patterson

4 years ago

Hi Kevin,

Very interesting !!!!

Did you make a complaint and eventually take it to the Financial Ombudsman Service (FOS)

4 years ago

It was not a "service enquiry". It was a formal complaint. Made by me a couple of months ago. I pointed out that there mortgage conditions said interest should be calculated to the day of redemption, not to the end of the month and complained to them about this. Their handling of my complaint was entirely unsatisfactory so I took it to the Financial Ombudsman Service.

It was the result of the FOS investigation that prompted West Brom to refer themselves to the Financial Conduct Authority. Had they not offered to do so, I would have written to the FCA myself, as I made clear to the FOS.

And had West Brom not recently hiked the interest rate on my so-called "Lifetime Tracker", I might not have pursued them so vigorously.

Kevin Thomson

4 years ago

Neil
I'm struggling to find details in my files. I made a complaint to WB, but FoS was not involved.
Whatever may have happened it's very clear to me that this overcharging has not suddenly come to light for WB. They've known about it all along.

Neil Patterson

4 years ago

Reply to the comment left by "Kevin Thomson" at "30/06/2014 - 10:19":

Hi Kevin,

I Lender is allowed two attempts to satisfy your complaint before the FOS get involved.

Did West Brom resolve it to your satisfaction or did you give up before that point.

Hopefully in the next few day you will get a refund letter, but if not you should complain.

Kevin Thomson

4 years ago

can't recall what happened Neil.

I will certainly pursue things with WB. I will also let them know that they're incorrect in saying this problem has just come to light, as I made them well aware of it in 2008!

A slippery bunch: but we knew that already.

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