Royal Bank announced today it will pay $7.2 million in refunds to about 23,000 of its residential mortgageholders who were assessed an incorrect prepayment charge.

The refunds are for a portion of prepayment charges relating to mortgage prepayments made from 1999 to 2004.

“We regret this situation and have been working diligently since it was discovered to fully identify all affected accounts,” Catherine Adams, head of RBC Home Equity Products said in a news release.

“We immediately conducted an in-depth review and our employees have also been correcting the situation on an individual basis. The review is now complete and refunds have been initiated for the remaining accounts affected.”

The mortgage prepayment charge applies when a customer breaks, converts or early renews their mortgage before maturity.

The bank said most mortgage holders will be automatically refunded by cheque and will initiate a manual review upon request for clients who no longer deal with RBC or where some prepayment information cannot be automatically retrieved.

More information is available on the bank’s Website at www.rbcroyalbank.com/prepayment, or by calling 1-800-769-2511.