Lloyds Banking Group has revealed that its Halifax subsidiary will make goodwill payments to 300,000 customers who received mortgage offers between September, 2004 and September, 2007.
It has set aside £500m for the payments, which suggests an average of nearly £1,700 per customer. Some will receive a flat rate payment of £250, others a variable payment which could run into thousands, depending on the size of the mortgage.
The payments arise from potential confusion over a guarantee that its Standard Variable Rate for mortgages rates would not rise higher than 2% above Bank of England Base Rate. Halifax later changed this mortgage cap to 3% above base rate but now admits that the wording in its documents "had the potential to cause confusion".
Halifax will be writing to 600,000 customers to establish which of them is due the money. It says they do not need to take any action.