Upheld: Complaints handling failures complaint against Yorkshire Building Society

Decision detail

Summary

Mrs L complained that Yorkshire Building Society reduced the interest rate on her 'reward' account (designated for loyal customers) from 3.70% to 3.50%, while not reducing rates on comparable non-reward accounts. She initially queried this with the firm, feeling penalised despite her loyalty, but Yorkshire Building Society treated it as a complaint and rejected it, focusing on its contractual right to vary rates rather than addressing her underlying concern. The ombudsman found that the product naming created a reasonable expectation of better treatment for loyal customers and that Yorkshire Building Society should have provided a clearer explanation at an earlier stage. The complaint was upheld, with the ombudsman rejecting the firm's £70 compensation offer as insufficient and noting that Mrs L's primary concern was for the firm to demonstrate understanding of her complaint.

The Ombudsman's reasoning

The ombudsman found that Mrs L's initial contact was a genuine query about perceived unfair treatment of a loyal customer, not a complaint. Yorkshire Building Society's failure to understand this and its response focusing on contractual rights rather than addressing the substance of her concern meant the issue could and should have been resolved earlier. The product naming ('reward' account for loyal customers) created a reasonable expectation that required clearer explanation when rates were reduced differently. The ombudsman considered that Yorkshire Building Society's later explanation during investigation was a genuine effort but came too late and still did not fully address Mrs L's core concern about feeling penalised despite loyalty.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website