Ernie fault robs Bond winners

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PREMIUM Bond prizes totalling pounds 350,000 have been withheld from more than 800 people because of a fault with Ernie - the machine used to pick the winning numbers.

It is understood that city accountants Deloitte and Touche have been asked to investigate the computer failure and to establish how many customers have been affected.

The fault came to light when one man contacted National Savings, the Government department which runs the pounds 13bn scheme, to query why his stake had not produced a return.

Statisticians calculate that it is reasonable to expect a pounds 10,000 investment in Premium Bonds to win anything from pounds 50 to pounds 1m in a year.

Last August, an investor purchased pounds 5,000 of bonds, one of 815 similar investments. But after failing to win any prize, he contacted National Savings which, in turn, detected a fault within the Electronic Random Number Indicator Equipment.

The system is now run by the German firm Siemens - which is also responsible for the operating system within the National Passport Agency. The issue of passports to tens of thousands of holiday-makers was delayed this summer because of computer problems.

The majority of Premium Bond holders who missed out on prizes are now understood to have received their winnings. But several winners are thought to have died without being aware they were owed a prize. Their estates will now benefit.