The regulator said that between 1 October 2011 and 31 July 2012, call handlers at YBS, dealing with customers in payment difficulties, failed to promptly identify the cause of their problems and their future financial prospects.
These failures led to significant delays in determining the most appropriate payment solutions. YBS properly viewed repossession as a last resort but failed to recognise that delays in reaching long term payment solutions which meant that some customers incurred increased fees and associated interest. YBS has already started to refund these customers.
Tracey McDermott, FCA director of Enforcement and Financial Crime, said: “Customers in financial difficulty need to be treated fairly and sensitively.
“Firms must ensure that they are taking into account the particular circumstances affecting customers who find themselves in difficulty.
“Firms need to be dealing with these customers proactively, without delays, in order to ensure they are not losing out.
“By allowing cases to drift without agreement, YBS’s actions meant that customers in vulnerable circumstances risked falling into further financial difficulty.”
The investigation found that insufficient training and fragmented guidance meant that call handlers did not consistently probe customers’ circumstances and identify the cause of their problems.
These issues were not spotted because weaknesses in checking procedures and management information, and a failure to identify customer complaints, meant that YBS management was deprived of information that may have highlighted poor treatment of customers.
In September and October 2012, the FSA wrote to YBS highlighting serious failings in the monitoring and oversight of cases discovered during a previous visit.
The FCA ordered a Skilled Person review in May 2013 which found that in 64 out of 87 cases considered, customers were not treated fairly and in 52 of these cases customer detriment could be identified.
YBS agreed, voluntarily and proactively, prior to the enforcement investigation commencing to refund all mortgage arrears fees, plus associated interest, charged to customers since January 2009.
The redress scheme is currently underway and approximately 33,900 customers will be repaid a total of £8.4m.
YBS agreed to settle at an early stage of the FCA investigation and therefore qualified for a 30% (stage 1) discount.
