18,000 Ulster Bank business customers overcharged by €36 million

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 €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.

Customers that have been impacted include present and previous customers, as well as some whose accounts were sold to loan purchasers.

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.

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.

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