Regulator warns firms on overcharging sanctions
BANKS, insurance firms and credit-card providers have been warned by the Financial Regulator that they face stiff sanctions unless they speed up how they deal with overcharging.
There are some 24 overcharging cases on the desk of Financial Regulator Matthew Elderfield.
Now a letter has gone out to almost 100 firms telling them that they need to repay customers -- who have been overcharged -- "speedily, efficiently and fairly" within six months of discovering the charging blunder, the Irish Independent has learned.
The letter warns: "In cases where a timeframe [on repaying customers] has been agreed with the Financial Regulator in relation to the resolution of a charging or pricing error and an institution fails to meet this deadline, the Financial Regulator may pursue this failure under the administrative sanctions procedure."
The regulator has the power to fine companies up to €5m under its sanctions procedures or fine an individual up to €500,000.
A raft of banks and insurance companies are yet to own up to customers that they have overcharged them.
It is understood that the two biggest banks, AIB and Bank of Ierland, are set to admit soon that they have overcharged more customers.
Both banks have been at the centre of overcharging scandals in the past.
Credit-card provider MBNA and Ulster Bank have also had to admit to wrongly charging customers in the past few months.
There is understood to be frustration on the part of the staff in the regulator's office that it is taking so long to deal with overcharging and that so many cases are emerging.
The letter send to banks and insurers also warns that the enforcement strategy at the regulator is to be reviewed, which implies that tougher measures could be imposed on firms that are not treating consumers fairly.
In December, MBNA admitted it would refund €18m after mistakenly overcharging an estimated 500,000 customers.