Clydesdale Bank admitted in July last year that it had failed to correctly calculate interest rates for some of its variable and tracker mortgage holders, resulting in minimum repayments being set too low.

Consumer Focus, which estimated the error would cost at least £10m, said the bank should stop attempting to recover the money from its customers and urged the FSA to take enforcement action unless Clydesdale Bank does so.

The bank apologised for the error when it came to light and increased customers’ payments to meet the shortfall.

However, the Financial Ombudsman Service (FOS) has said that consumers should not be held responsible for errors of this type. Recent FOS figures revealed that, in the second half of last year, complaints from Clydesdale mortgage customers increased 600% on the first six months of 2010.

The FOS has upheld 87% of complaints, against an industry average of 36%, and received money back from the bank.

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Mike O’Connor, chief executive of Consumer Focus, said: “Clydesdale Bank must now stand up and do the right thing for anyone who has been asked to make up shortfalls caused through no fault of their own.

“It should give up attempts to recover this money and certainly refund any customer who paid after the clarification by the FOS.  

“We would expect any bank that wants a reputation for treating customers fairly to repay everyone who was caught out by the bank’s own mistake.”

A statement from Clydesdale Bank said: “This is not a new issue and our position remains unchanged. It is disappointing that the conclusions reached by Consumer Focus do not reflect the information we have provided them.

“We apologised back in July to those customers affected by this mortgage underpayment issue. The vast majority accepted they were simply being asked to pay back the amount they’d originally agreed to when taking out their mortgage.

“Our priority has been to be fair to all customers in the way we dealt with this and we have considered each case on its individual merits, offering a range of flexible payment options.

“The Ombudsman data must be taken in this context as it does not reflect the overall high level of service we provide for our customers.”