This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-30413572
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
Northern Rock borrowers set for compensation | |
(about 1 hour later) | |
Some 43,000 borrowers are set to get compensation after a High Court ruling over the wording of documents sent out by former bank Northern Rock. | |
Northern Rock Asset Management (NRAM), the nationalised "bad bank" remains of Northern Rock plc, will have to pay £261m in refunded interest. | |
The case related to Northern Rock's "Together Mortgage", and questioned the wording in past loan documents. | The case related to Northern Rock's "Together Mortgage", and questioned the wording in past loan documents. |
NRAM is now considering whether to appeal against the ruling. | NRAM is now considering whether to appeal against the ruling. |
The total payout is expected to see each affected borrower refunded an average of about £6,000, with the total overall bill being paid in part by the UK taxpayer. | |
The compensation will come in the form of a shorter loan period. | |
The Together Mortgage allowed unsecured loans of up to £30,000 alongside mortgages, to be repaid at the same rate as the mortgage. | The Together Mortgage allowed unsecured loans of up to £30,000 alongside mortgages, to be repaid at the same rate as the mortgage. |
But the High Court said paperwork relating to unsecured loans of between £25,000 and £30,000 pounds taken out between 1999 and 2008 were incorrect, and that customers should be paid back interest and fees. | But the High Court said paperwork relating to unsecured loans of between £25,000 and £30,000 pounds taken out between 1999 and 2008 were incorrect, and that customers should be paid back interest and fees. |
In 2012, NRAM had to pay out £270m in refunded interest after the bank failed to make mandatory disclosures in customer letters from 2008. | In 2012, NRAM had to pay out £270m in refunded interest after the bank failed to make mandatory disclosures in customer letters from 2008. |
Newcastle-based Northern Rock was nationalised in 2008 following its near collapse at the onset of the global credit crunch. | Newcastle-based Northern Rock was nationalised in 2008 following its near collapse at the onset of the global credit crunch. |
Two years later it was split into a "good" and a "bad' bank, with the Northern Rock name transferred to the good bank. | Two years later it was split into a "good" and a "bad' bank, with the Northern Rock name transferred to the good bank. |
In late 2011 Virgin Money bought the good part of the business, and discontinued the Northern Rock name. | In late 2011 Virgin Money bought the good part of the business, and discontinued the Northern Rock name. |
Previous version
1
Next version