Five questions answered on Clydesdale and Yorkshire Bank mortgage fines

How big were the shortfalls?

Clydesdale and Yorkshire Bank has been ordered to compensate mortgage customers it treated unfairly as well as pay a fine. We answer five questions on the fine.

Who has ordered Clydesdale and Yorkshire Bank to compensate customers?

The Financial Conduct Authority (FCA) has fined the bank £8.9m. The authority said customers were not made aware of their rights after errors in 42,500 accounts in 2009.

It added that Clydesdale was concerned with its own commercial interests rather than its customers.

Around 22,000 customers will now receive payouts averaging £970.

What happened exactly?

There was a calculation error on customers’ mortgage repayments demands over a four year period to 2009. Due to the error, 22,000 customers had underpaid their mortgages and were subsequently expected to increase their monthly repayment to make up for the short fall.

The FCA said this was unfair and the bank should have taken on the cost rather than shifting it to the customer.

How big were the shortfalls?

The underpayments ranged from £20 to over £18,000. They will now be paid back in compensation. Those with outstanding mortgages will see their debt reduced while others will receive a cheque.

A further 20,500 who paid too much of their mortgage may be able to claim compensation as well.

Overall the bank has said the cost of the fine and compensation would total £42m.

What has the FCA said?

"For most people mortgage payments are their biggest monthly outgoing and we all budget on the assumption that the information our mortgage lender gives us about what we need to pay is correct," said Tracey McDermott, of the FCA.

"Here Clydesdale failed in that basic duty and, when it discovered the problem, sought to pass all of the consequences on to its customers - expecting them to find the money to remedy mistakes which were entirely of Clydesdale's making.

"Clydesdale is today paying the price for its decision to put its bottom line ahead of the need to ensure its customers were treated fairly."

What has Clydesdale said?

"I am very sorry that this was not handled as it should have been. We should have made it clear at the time that this was entirely our fault and that some customers may be entitled to compensation," said David Thorburn, chief executive of Clydesdale and Yorkshire Bank, which is owned by National Australia Bank.

"Our priority is to fix this for customers as quickly as possible and they will each receive a letter explaining how we will make this right for them."

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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He went in to report on crystal meth – before long, Luke Williams was hooked

The journalist moved into a house of meth addicts to investigate the drug. Within a month, he was using, too.

“I got a story, a very good story,” writes the young Australian journalist Luke Williams in the first chapter of his new book, The Ice Age. “Only it wasn’t the one I was expecting.” For three months in 2014, he lived in a house of crystal meth addicts in a suburb of Melbourne, Australia, to investigate the drug. Within a month, he had forgotten why he was there. He had become addicted himself.

What follows is a dizzying retelling of his experiences, which veers between stories of Williams’s psychotic episodes and facts about his drug of choice. His descent into addiction happened in a nondescript house in Pakenham, a suburb to the south-east of Melbourne – “one of the most badly affected meth areas in Australia”.

Williams, now 36, grew up nearby and went to school there. He already knew two meth users in the area well enough to rent a room with them – an out-of-work labourer called Smithy and his live-in ex-girlfriend Beck. It was they who gave Williams his first shot of crystal meth, less than three weeks into his stay.

The crystal form of methamphetamine, also known as “ice”, is an addictive and powerful stimulant that causes euphoria. It heightens alertness, energy and arousal, with comedowns that can lead to aggression and violence.

It has gained cultural significance in recent years because of the US television drama Breaking Bad, in which an otherwise mild-mannered and law-abiding chemistry teacher “cooks” and sells crystal meth. Yet not much is known about the long-term effects of the drug, which in some countries – such as the Czech Republic – is a graver problem than heroin. In the UK, crystal meth activity is low and mainly linked to the gay chemsex party scene, where drugs are used to enhance group sex experiences.


Photo: Scribe

The drug is linked to severe psychosis, which Williams experienced first hand. Detailed in his book in a neat little list, like a morbid twist on a teenage diary, are Williams’s delusions, entitled: “My psychotic ideas”. Some are harrowing. His conviction that his parents are trying to poison him, for example, which results in him threatening to kill them “with my bare f***ing hands”. Others are amusing: he abandons his journalistic endeavour almost immediately in the belief that his calling is to become a famous rap star.

“I think that I could maybe do spoken word, but rapping? No, no,” he chuckles, when he speaks to me via Skype from Nepal, where he is researching another story. He says that he wanted to investigate crystal meth use partly because he was bored. He had left journalism to work at a law firm, and his life “lacked a bit of kick”.

Although he describes himself as “white, middle-class [and] educated”, he was fixated by the characters from his youth on the city’s outskirts. “I missed [them] in the middle-class world; it seemed so polite and clean . . . I looked forward to getting back there, living cheap, and when I saw the state some of my friends were in, I was very curious to know what was going on with them. Nobody was writing about the working class and the underclass.”

Williams quickly shifted from observer to addict. In alarming and frank detail, his book tells of marathon masturbation sessions (his record was 16 hours), physical altercations and a thick fog of paranoia. He would search his name online and become convinced that anything written by, or about, the name “Luke Williams” involved him.

He became so obsessed with the memory of an ex-boyfriend called Nathaniel that he believed that Smithy had turned his ex “into a transsexual, so that he and his mates could have their way with the new female Nathaniel”.

After three months, Williams was kicked out of the house by an aggressive Smithy, who thought the journalist was stealing his cannabis (he wasn’t). The nearby hospital gave him no help, so Williams ended up on the streets. After a lot of persuasion, he eventually returned to safety with his parents. He has been recovering ever since.

There is talk of a crystal meth “epidemic” in rural and suburban areas of Australia, which has among the highest usage of the drug in the world. The number of people using it there tripled from 2011 to 2016, and 7 per cent of Australians over the age of 14 have reported using amphetamines or methamphetamines (in the UK, it’s 1 per cent).

Although Luke Williams’s story is an insight into one of the world’s most dangerous substances, it’s also a lesson in doing your research. The first time Williams took crystal meth, it was injected by one of his housemates and he believed that it was no different from powdered meth – more commonly known as speed – which he had been using occasionally to give him the energy to write.

The group called everything “meth”, regardless of what they were taking. “Our lingo just didn’t differentiate,” Williams tells me. “People don’t really understand the difference. I got the opportunity to say in the public domain that [crystal meth] is different . . . It eats away at your inside.”

The Ice Age: A Journey Into Crystal-Meth Addiction by Luke Williams is published by Scribe.

Anoosh Chakelian is deputy web editor at the New Statesman.

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era