Qualified advisers answering your
Financial Questions
call 0800 092 1245

Northern Rock forced to pay 43,000 customers compensation


Former high street bank Northern Rock has been ordered to pay 43,000 borrowers compensation over misleading wording of past loan documents.
A High Court ruling confirmed that Northern Rock Asset Management (NRAM), the nationalised remains of Northern Rock PLC, will have to pay £261 million to previous customers.

The ruling relates to the banks “Together Mortgage”, which allowed unsecured loans of up to £30,000 to be taken out alongside mortgages, and to be paid back at the same time. The High Court said paperwork relating to unsecured loans of between £25,000 and £30,000 taken out between 1999 and 2008 was incorrect, and that customers should be paid back interest and fees.

NRAM has already set aside £270 million for customers who had borrowed up to £25,000, but customers who borrowed more were not included . However, The new ruling means customers who borrowed more than £25,000 are now due compensation as well. NRAM is considering weather to appeal 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.

Richard Banks, Chief Executive Officer of UKAR, owners of NRAM,said:

“We brought this case to the High Court because we are determined to act in full accordance with the law and do the right thing for both customers and taxpayers.

"We are disappointed by the decision because no detriment has been suffered by customers.

"We are now considering the impact of the judgment and taking legal advice on whether to appeal. Customers do not need to act at this stage. If any redress becomes due, we will write to all those affected to advise on next steps.”

Need financial advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details