RBS Payout After Lost Account Problem

14 December 2015, 14:27 | Updated: 14 December 2015, 14:29

Royal Bank of Scotland (RBS) said it will reimburse around 4,500 customers after it wrongly told them they did not hold a dormant account with the lender.

The mistake came to light after customers applied to a programme run by trade body, the British Bankers' Association (BBA), called the Lost Account Scheme, to connect bank account holders with dormant cash.

But RBS mistakenly told customers that they did not hold dormant accounts with the bank.

RBS apologised for its error, and said that after spotting its mistake it took action to rectify the situation.

The bank said it is contacting affected customers, adding the average amount involved is less than £50.

It said: "Unfortunately, we wrongly advised some customers who had made a request through the BBA Lost Account scheme that they did not hold a dormant account with us.

"We are writing to all affected customers and asking them to visit their local branch with ID to reclaim their outstanding balance.

"We have apologised for the inconvenience caused and are making sure that we put this right.''

Last week bank chief executive Ross McEwan said rebuilding trust in the banking fraternity would take "a long time''.

RBS is 72.9% owned by the taxpayer, after being bailed out during the financial crisis in 2008.

In July the Government began the process of privatising RBS by selling a £2.1 billion stake in the bank - at a loss of more than #1 billion to the taxpayer.

In last month's Autumn Statement Chancellor George Osborne said the Government plans to sell off a further £25 billion of Royal Bank of Scotland (RBS) shares, as it accelerates its programme of disposing of taxpayer-stakes in high street banks.

It also reiterated its plans to sell around £2 billion worth of shares in RBS to retail investors next spring, backed by a nationwide TV, print and digital campaign.

The Treasury said: "The Government is committed to returning the financial sector assets acquired in 2008-09 to the private sector.

"As there is no longer a policy need for the Government to hold these assets, it will seek to dispose of them, reducing public sector net debt while maximising value for taxpayers.''

Mr Osborne's statement added that the Government expects to sell a total of £7.5 billion of Bradford & Bingley assets during the course of this parliament, which ends in 2020.

In November, the Treasury sold £13 billion of Northern Rock mortgages formally thought of as a bad risk to US investment firm Cerberus Capital Management, in what is described as the largest ever financial asset sale by a European government.