A Bradford-based finance organisation is to contact more than 150,000 former customers of defunct bank Northern Rock with details of possible payments worth an average of £1,775 in compensation following a paperwork error.
UK Asset Resolution, based at the former Bradford & Bingley headquarters at Crossflatts, is to contact customers of Northern Rock Asset Management, the state-owned remnant of Northern Rock plc of which it is the holding company, about payouts of £270 million in refunded interest after the bank failed to make mandatory disclosures in customer letters since 2008.
Speaking at Treasury questions, Chancellor George Osborne said customers who had loans below £25,000 were affected and blamed “an error originating in 2008 when Northern Rock was in public ownership”.
UK Asset Resolution identified certain loans where the documentation was not compliant with Consumer Credit Act requirements.
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