Ulster Bank has reportedly admitted to overcharging its payment protection policyholders and, as a result, will be refunding around 25,000 customers, forking out a massive E4 million, the Irish Independent has revealed.

According to the Belfast Telegraph, the bank failed to provide a full refund to customers who repaid their personal loans early for their payment protection policies.

Media releases have cited Ulster Bank as confirming that around 25,000 customers were affected up until 2005, and were overcharged by an average of E170 each. The BBC added that compound interest would be added to the refund.

Attacking the banking error, cited in the BBC, Consumers’ Association of Ireland CEO Dermott Jewell, said: It’s a damning indictment of Ulster Bank that they have a system that failed at this level.

According to the BBC, the Bank of Ireland was found to have overcharged 65,000 customers on similar insurance policies, which resulted in the bank being hit with a E15 million bill.