Ulster Bank will refund and compensate thousands of business customers who were overcharged interest.
An error affected 18,000 loan and overdraft accounts, connected to around 15,500 customers since 2012, resulting in an average refund of less than €2,000 per account.
Up to 18k business loan accounts overcharged since 2012, @UlsterBank admits. Average refund 'less than €2,000'. Could be up to €36m handed back. Discovered while examining files in separate tracker scandal. "Will take time to fully resolve," it says. #iestaff— Padraig Hoare (@PodgeExaminer) June 14, 2018
Up to €36 million is expected to be handed back by the bank.
"We sincerely apologise to our customers for this," the bank said in a statement.
The refund will be issued between September and March 2019.
The error arose after the bank changed the way it calculated its cost of funding in 2012, which led to an increase in the interest rate levied on business customers.
The latest banking scandal- @UlsterBank admits to overcharging 18,000 buisness customers amounting to a total of circa €36 million overcharged— Pearse Doherty (@PearseDoherty) June 14, 2018
An investigation last year found that some customers had not been moved to a contract that allowed for such a change, and as a result should have been kept on the old rate.
Ulster Bank said the overcharge saw customers pay around 0.30% more per year in interest since 2012.
These customers will receive a letter informing them that they are impacted in due course.
The bank plans to issue a refund which will include the overcharged amount plus interest.
The bank will now begin writing to customers, with repayments due to commence in September, 75% of cases refunded by the end of this year.