RBS launches internal inquiry after failing to inform customers of old accounts

Royal Bank of Scotland (RBS) has launched an internal inquiry after it was discovered it had been "misinforming" 4,500 customers over inactive accounts.

People attempting to track down dormant accounts were told their money was not being held by the bank, when in fact it was.

The lender has informed the Financial Conduct Authority of the matter, which has ordered it to contact everyone affected.

The average amount left in the bank accounts is £50.

"We are very sorry this happened, and as soon as we discovered this, we took steps to correct our error," RBS was quoted by the Sunday Times as saying.

The bank explained that it had mistakenly created incorrect filters on the computer software used by websites that have been set up to enable people to trace funds left in dormant bank accounts.

It comes after the bank's chief executive Ross McEwan said the bank would not be able to rebuild the public's trust following the financial crisis "in a matter of one or two years".

"[The recession] was the biggest financial crisis since the thirties and I don't think there's a moment of forgiveness," he said.