$72.5 Million in Compensation For Endowment Mortgage Errors

December 5, 2000

As expected, Royal Bank of Scotland has been ordered to pay an estimated £50 million ($72.5 million) in compensation to customers of its Royal Scottish Assurance affiliate who bought endowment mortgages between 1990 and 1994.

The announcement by the U.K.’s Financial Services Authority, follows the imposition last week of a record £2 million ($2.9 million) on RSA, after it miscalculated premium payments on the policies, and then, requested that the insureds pay more, rather than informing them of the problem.

RBS has already set aside the amount estimated and has said it will seek damages from its joint venture partner in RSA, insurer Scottish Equitable.

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