West Bromwich to refund £27.5m to overcharged landlords
The West Bromwich Mortgage Company is to refund £27.5m to thousands of landlords who were overcharged.
The Appeal Court has ruled that the lender, which is an arm of the West Bromwich Building Society, was wrong to increase its charges for buy-to-let tracker mortgages.
In September 2013 it announced a 1.9% increase in its tracker rate, even though base rates had not risen.
The lender said it was disappointed, but it had acted to protect its savers.
As many as 6,500 landlords with multiple properties now stand to be refunded an average sum of more than £4000 each.
So-called tracker mortgages are supposed to follow the Bank of England's base rate, which has remained at 0.5% since 2009.
The case was brought by Mark Alexander, a former mortgage broker who subsequently set up an advice website.
He was backed by around 400 landlords who were in a similar position to him.
Previously the High Court had ruled against Mr Alexander, but the Court of Appeal has now reversed that decision.
The West Bromwich Building Society said it would record a loss in the current financial year as a result, but that its capital position remained strong.
"At all times we acted to ensure we were treating customers fairly and that our approach was in the best interests of the Society and its members as a whole," said Jonathan Westhoff, the company's chief executive.
"We will now contact all affected borrowers and ensure we process promptly any reimbursement they are due."