Halifax bank corrected mistakes yesterday that it made between 1979 and 1989 in calculating mortgage payments for 40,000 customers, which have in some cases led to the bank reimbursing £6,000 each to borrowers.
The mistake has cost the bank around £6.6m to cover the errors, and originates from the failure of a computer system used by Leeds Permanent Building Society, which was bought by Halifax in 1995. The system failed to take account when calculating interest payments of customers who either paid extra amounts or who took temporary payment holidays from home loans under the Leeds Permanent interest-only mortgage brand. Around 70 per cent of the borrowers affected have inadvertently benefited as they had paid too little interest by on average £175 each.
In 3,000 cases customers have been overcharged interest on their mortgage. Halifax, which is now part of HBOS, sent cheques to these customers yesterday and said the average over-charge was £50, but in some cases customers are entitled to compensation of between £5,000 and £6,000, which includes an ex-gratia amount to take account of interest they would have received if the over-payment had been saved in a bank account.
Paul Duffin, head of mortgages at Halifax, said: "This is our problem, not our customers". Our objective is to return every penny to customers who have been overcharged but we are waiving all underpayments." Halifax, the UK's largest mortgage provider, which merged with Bank of Scotland last month, said the problem did not affect any of its other mortgage business.
As well as compensating Leeds' customers who still hold their mortgage, Halifax is trying to contact past customers by writing to their last known address and advertising in newspapers. Any compensation that is not claimed within three years will be donated to the Halifax Charitable Foundation. Customers who come forward after this time will also be reimbursed. Anyone who thinks they might have been affected can call the Halifax on 0845 604 1280.Reuse content