Yorkshire Building Society · DRN-5947942

The complaint Mr and Mrs O complain that they were given misleading information from Yorkshire Building Society trading as Chelsea Building Society (“CBS”) about the interim charging order registered against their property. What happened Mr and Mrs O had a Buy-to-Let (BTL) mortgage with CBS. Some years ago, the property was repossessed and sold with a shortfall of around £70,000. In order to secure the shortfall debt, in 2012 CBS applied through the court to register an interim charging order against Mr and Mrs O’s residential property. CBS says Mr and Mrs O made a number of payments against the shortfall until September 2020 leaving a current balance of around £65,000. In early 2025 Mr and Mrs O called CBS to enquire about the outstanding charge. Mr and Mrs O were told that the BTL mortgage had closed and the legal charge registered against that property had been removed – which was correct. However, CBS failed to provide accurate information about the outstanding interim charging order that remained on their residential property. Several calls later Mr and Mrs O were given the right information. Mr and Mrs O complained to CBS about the misleading information they say they received in relation to the status of the charging order. CBS accepted it should have given clearer information. It upheld the complaint and paid Mr and Mrs O £175 compensation. But it didn’t agree that the charge was incorrectly registered or that it should be removed. Unhappy, Mr and Mrs O came to our Service. They say that in light of the miscommunication, CBS should remove its legal charge and pay more compensation. An Investigator looked into things and didn’t recommend that the complaint be upheld. Mr and Mrs O didn’t agree and asked for their case to be decided by an Ombudsman. In summary they say that their opportunity to remortgage was hindered by the registered charge and that they incurred avoidable costs during the process as a result of the misleading information they received. They don’t agree that they’ve been fairly compensated in the circumstances. The Investigator considered Mr and Mrs O’s comments but explained why his opinion remained unchanged. Because an agreement hasn’t been reached, the case has now been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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The key facts about this complaint aren't in dispute. CBS has accepted it got things wrong – it accepts it could have given clearer information about the status of the charging order during Mr and Mrs O’s enquiries. So, the only issue I have to decide is whether the things CBS has done to put things right, including the amount of compensation awarded to date, is fair and reasonable. I’ve carefully considered everything Mr and Mrs O have said about how they’ve been impacted as a result of the error, and how they should be fairly compensated in the circumstances. When making an award for compensation, I must decide what’s fair and reasonable to both sides involved, giving careful consideration to all the circumstances of this case. I also think it’s important to explain that, as a Service, our awards are designed to compensate consumers – not punish organisations. I’ve given careful consideration to all the submissions made by both parties, but I won’t address each and every point that has been raised. I’ll focus on the matters that I consider most relevant to how I’ve reached a fair outcome – in keeping with the informal nature of our Service. Having done all that, I think this complaint has been settled fairly by CBS, I’ll explain why. Mr and Mrs O have made legal arguments to support their complaint by making reference to the principle of Estoppel. Firstly, I think it may help if I explain that our Service was set up as an informal and free alternative to the courts. We resolve disputes between financial businesses and their customers by reviewing all the available evidence and then making a decision based on what we think is fair and reasonable in the circumstances of the case. To do this, we take many things into account, including the law, codes, and good practice. But ultimately my role is to make a decision based on what’s fair and reasonable. This may mean reaching a different outcome to what a court would decide when applying legal rules. In 2012 the court granted CBS an interim charging order to be registered against Mr and Mrs O’s residential property. Mr and Mrs O were aware the charging order existed as confirmed by them in their recent calls with CBS. Mr and Mrs O first made contact with CBS about the outstanding charge on their property on 18 February 2025. During this call they were told that the charging order was in place and that they’d need to call CBS’ acting third party legal representative (who I’ll refer to as “O”) for more details. So, at this point I’m satisfied Mr and Mrs O knew the charge stood. The shortfall balance in 2012 was around £70,000 and CBS says the current outstanding balance is around £65,000. Mr and Mrs O stopped paying towards the shortfall in 2020 and they’d only cleared £5,000 – a small proportion of the loan. So, I think they ought reasonably to have known at the time of their enquiries that the charge remained active – given they’d not repaid the shortfall debt. Mr and Mrs O called CBS back on 16 May 2025 and again on 19 May 2025 to say they’d not been able to obtain information from O. They said that they were in the process of remortgaging their property and they needed the charge removed. It’s not in dispute that some confusion occurred during these calls. Upon providing the address for the BTL property, CBS said that the mortgage was closed and the charge against their BTL property had been removed. An email was sent to Mr and Mrs O on 22 May 2025 confirming this. Whilst this information was true, CBS accepts that it should have pointed out there was also an outstanding balance in respect of the shortfall with its debt recovery team – for which a charge remained registered against their residential mortgage. On 27 May 2025 Mr and Mrs O were given the right information.

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CBS has offered £175 compensation for its error, which I think is reasonable and in line with our Service’s guidelines on such compensation1. As I’ve said, it’s clear Mr and Mrs O were aware of the charging order prior to the contact they made in 2025. The existence of the live order was confirmed to them on 18 February 2025 and for reasons I’ve explained they ought to have known this was the case prior to their enquiries. The confusion occurred in May 2025. The information given between 16 and 22 May 2025 could have been clearer. Mr and Mrs O were given the correct information on 27 May 2025 – less than two weeks after. I understand Mr and Mrs O say they suffered a loss of expectation during this period – but as I’ve said I think CBS’ award fairly compensates them for that. Our published guidance on awards says that an award of up to £300 is fair in situations where: “if an error has caused the consumer more than the levels of frustration and annoyance you might reasonably expect from day-to-day life, and the impact has been more than just minimal, then an apology won’t be enough to remedy the mistake. An award between £100 and £300 might be fair where there have been repeated small errors, or a larger single mistake, requiring a reasonable effort to sort out. These typically result in an impact that lasts a few days, or even weeks, and cause either some distress, inconvenience, disappointment or loss of expectation.” I think this accurately describes the impact suffered by Mr and Mrs O. And I’ve seen nothing that persuades me the impact described fits into any other of our awards banding categories. Mr and Mrs O say that they’ve incurred financial loss directly as a result of CBS’ actions. But I’m not persuaded that’s the case. Mr and Mrs O had already started their remortgage enquiries prior to the miscommunication in May 2025. In May 2025 Mr and Mrs O said they were in the process of remortgaging their property and urgently needed the charge removed. So, at this point they were acting on the information they already had – that being that a charge stood. I appreciate the remortgage process involved some effort, but I think Mr and Mrs O would have always explored this as an option in any event regardless of the charge being present or not. Mr and Mrs O say their remortgage application was formally declined because of the charging order. I appreciate that was disappointing for them but it was always likely this was going to be the case. Given CBS has registered the charge in accordance with the court order in 2012, I’ve not seen anything that suggests its acted unfairly in the way that its registered the charging order. And so, I can’t reasonably say that it should remove it. Just because CBS provided incorrect information related to the charging order, that doesn’t mean it’s required to honour its removal. I’ve considered all the reasons why Mr and Mrs O feel they should be awarded more compensation and their arguments for why they think the charge should be removed. Whilst I do acknowledge the inconvenience and frustration caused, for the reasons I’ve explained, 1 https://www.financial-ombudsman.org.uk/consumers/expect/compensation-for-distress-or- inconvenience

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I don’t think CBS needs to take further action beyond what it has already offered as this wouldn’t be proportionate or appropriate given the error that occurred here. My final decision My final decision is that I don’t uphold Mr and Mrs O’s complaint against Yorkshire Building Society trading as Chelsea Building Society. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs O and Mr O to accept or reject my decision before 22 April 2026. Arazu Eid Ombudsman

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