Norwich Union refunds after error

Norwich Union says it discovered the error in October

About 70,000 investors in Norwich Union funds are set to receive an average of £90 each after the firm said it had made a mistake over charges.

Norwich Union said it had found that with some funds, policyholders had not been informed about all of the fees.

However, it said investors had not been overcharged as a result of the error.

The refund of the undisclosed charges will be made by increasing the value of the investment funds held by the customers affected.

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Norwich Union said it had spotted the error following a review in October.

We haven't been told we have to refund - we just think it's the right thing to do James Evans, Norwich Union spokesman

It found that while policyholders had been correctly informed of the annual management charges, it had failed to disclose other charges, such as administration fees, which would also be deducted.

The mistake relates to some of its unit-linked funds, including its Corporate Bond Fund and Balanced Distribution Fund.

Norwich Union will be writing to those customers affected over the next three months to tell them when their policy value will be increased.

Any customers affected who have since left the Norwich Union funds will receive their refund by cheque.

"Charges were correctly taken - there was no overcharging," said Norwich Union spokesman James Evans.

The company said it had informed City regulator, the Financial Services Authority, of the charging error and its proposed plan of action.

"We haven't been told we have to refund - we just think it's the right thing to do," Mr Evans added.