By Daniel Hunter

The Bank of Scotland has been accused of "criminal fraud" by Northern Ireland's Attorney General.

John Larkin QC made the accusations as he spoke about the bank's treatment of customers who fell behind on their mortgages.

A court hearing ruling had said that Bank of Scotland had double-billed some customers who were in arrears.

Mr Larkin said there was evidence of "criminal fraud under the 2006 Act" and the matter had been passed onto the police.

He also suggested that the seriousness of the accusations was high, acknowledging that it is extraordinary that he had to step in to a "private law" dispute between bank and customers.


Stephen Shaw QC, barrister for the Bank of Scotland, said the Attorney General's comment were "based on a misapprehension".

The original case was based on arrears that were added to the original mortgage borrowing - a process known as capitalisation.

The judge ruled that once capitalisation had taken place, the mortgage should no longer be considered to be in arrears.

But the Bank of Scotland failed to treat these mortgages as out of arrears, and continued to press ahead with threatening and bringing legal cases.


Bank of Scotland was due to appeal the ruling, but decided against it on Monday.

In a statement, Lloyds Banking Group, which owns Bank of Scotland, said: "We no longer believe that an appeal is necessary in this case and as such have withdrawn from the appeal process.

"We would reiterate that repossession is always a last resort.

"We work hard to ensure that we are providing customers facing financial difficulty with the right support to help ease their circumstances and ultimately help to resolve the situation in what we appreciate is an extremely sensitive time."

The spokesperson added: “There have been no allegations of fraud in these cases. We strongly take issue with any implication that this is the case. We have offered to meet with both the Housing Rights Service and the Attorney General for Northern Ireland in order to correct the assumptions on which these allegations have been made.”

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