Bank refund: Lloyds, Halifax and Bank of Scotland customers in line for payments

Up to 200,000 savers are due a share of up to £10 million after Lloyds spotted an interest rate error dating back to 2012.

Lloyds Banking Group has said it will repay nearly 200,000 current and former customers after it spotted errors that could have left them out of pocket.

Reports vary on exactly how much affected customers will receive, but it’s believed to be between £6 million and £10 million in total, meaning an average payout of between £30 and £50.

The bank said it started writing to those eligible for the payments earlier this month.

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Why is Lloyds repaying customers?

The banking group has identified administrative errors dating back to 2012.

In short, it failed to tell various customers that the rates on their savings accounts or current accounts were about to be slashed.

Not only is this required, but it would usually spur most people into action to shift their money into a better account, but because they weren’t informed they potentially missed out on more generous deals.

As a result, Lloyds is making the payments to account for this lost interest.

The banking group has stressed the issue has now been fixed so there’s no chance of it happening again.

Who is eligible?

Affected customers will have or had a savings or current accounts with Lloyds, Halifax or Bank of Scotland.

The bank says it will use a tracing service to find those who are no longer customers, meaning you won’t need to do anything – just keep an eye out for a letter in the post.

Financial news site MarketWatch, which uncovered the story late last week, says it has seen one of the letters sent to affected customers.

It is titled “We’re making a payment to you” and states: “We didn’t send you some letters about changes to your savings account when we should have.

“If we had sent this information to you at the time, you may have chosen to put your money in a different savings account. I’m sorry this happened.”

We should stress that whenever stories of mass refunds hit the headlines, scammers are seldom far behind.

So if you do receive an unsolicited letter (or email for that matter) claiming to be from your bank, it’s worth researching their contact details separate from the letter in question and asking for more information.

How much will you get?

While the average payout is £30-£50, the exact amount will depend on your situation.

Effectively, you’ll receive the amount of interest you’d have earned had the rate on your account not been slashed.

So it all depends how far the rate fell and how long you held the account for.

If you still hold the account, seven years’ worth of interest could work out to a tidy sum.

What has Lloyds said?

A spokesperson told MarketWatch: "We have identified that some of our customers have received delayed information relating to their account with us.

“We are contacting customers to apologise and make them aware of any missed information."

“We will, where appropriate, offer redress. Customers do not need to take any action as anyone affected will be contacted.”

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