View the article online at http://citywire.co.uk/new-model-adviser/article/a645019
Northern Rock forced to pay £270m after admin gaffe
by Daniel Grote on Dec 12, 2012 at 08:04
State-owned lender Northern Rock is being forced to repay £270 million to customers due to an administrative error committed in 2008, according to reports.
The bank will hand an average payment of £1,800 to more than 150,000 customers, after failing to comply with disclosure rules on credit balances.
Economic secretary to the Treasury Sajid Javid said that customers had not been overcharged, but that refunds were due because 'certain paragraphs of mandatory wording were written incorrectly and compulsory information about the amount of credit was not included in the statement'.
The customers affected are almost all those who took out 'Together' unsecured credit alongside mortgages, which allowed them to borrow as much as 125% the value of their properties.
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