Northern Rock payouts cost taxpayer £270m
An administrative error means thousands will receive pay-outs
Northern Rock will be forced to pay out £270 million in compensation to loan customers following an administrative error made in 2008 when it was nationalised in the wake of its collapse, says The Daily Telegraph. Around 150,000 customers will receive pay-outs averaging £1,775 each from taxpayers' coffers because the nationalised bank failed to comply with disclosure rules on credit balances.
The failure is regarded as both embarrassing and irritating for Chancellor George Osborne. Sajid Jarvid, economic secretary to the Treasury, said customers were entitled to a refund in interest paid because "paragraphs of mandatory wording were written incorrectly and compulsory information about the amount of credit was not included in the statement".