Money alert: Clydesdale Bank forced to pay compensation for mortgage error

Clydesdale Bank is being forced to write to its mortgage customers again after botching the way it dealt with a previous error when it miscalculated repayments on more than 42,500 mortgages.

The Financial Conduct Authority fined the bank £8.9m this week for failing to inform its customers clearly of their rights after the first mistake. It is also forcing the bank to compensate all those who underpaid on their mortgages as a result of the error and to write to other affected customers.

Those hit by the blunders will receive a letter explaining the next steps. Where the error resulted in a shortfall, the bank will write it off, make a payment representing interest costs and recalculate the reduced payment amount where appropriate. The average shortfall to be written off is £970, Clydesdale said.