Thursday 18 July 2019

43,000 customers to get refund in latest overcharging blunder to hit banking sector

Ulster Bank is to repay 23,000 business customers after finding it had charged them the wrong fees
Ulster Bank is to repay 23,000 business customers after finding it had charged them the wrong fees
Charlie Weston

Charlie Weston

Thousands of customers are due refunds after two banks admitted overcharging them.

Ulster Bank is to repay 23,000 business customers after finding it had charged them the wrong fees.

Bank of Scotland (Ireland) is also paying back money to around 20,000 mortgage holders over a miscalculation of interest charges, the Irish Independent has learned.

The amounts are small, but a financial expert said overcharging was happening too often.

The two overcharging issues are just the latest in a long list of similar problems for banks here, the most notorious being the tracker mortgage scandal. This has affected almost 40,000 account holders and is set to cost the banks €1bn.

Now customers of Ulster Bank and Bank of Scotland (Ireland) have been written to and told they are to be given refunds.

Ulster Bank said around 23,000 business customers were overcharged in 2013. This was due to what the bank said were in-branch transactions being classified incorrectly for business customers.

The average refund is €22 per customer, with the bank refunding the overcharge, plus compensatory interest and a transaction fee to cover any transaction costs.

An Ulster Bank spokesperson said: "We are writing to some business customers who have been impacted by a past overcharging error on our part.

"Some over-the-counter business charges were classified incorrectly in branches and the average refund is €22 per customer. We apologise sincerely for this and customers with any queries can contact us on 1800 303 068."

People who took out a mortgage with the former Bank of Scotland (Ireland) got letters recently telling them they had been overcharged. It is understood this affects around 20,000 mortgage holders.

The loans were sold last year to Barclays Bank.

A spokesperson for Lloyds Bank in the UK, which took over the Bank of Scotland (Ireland) loan book soon after the financial crash, said confusion over the leap year in 2008 had led to too much interest being charged.

The mortgages are now serviced by Shannon-based Pepper.

One letter seen by this publication said the refund amount was €27.55.

"We are contacting some customers in relation to an additional day's mortgage interest charged for 29 February 2008. We are currently reviewing relevant accounts and will ensure that no customers are out of pocket as a result. Customers can contact us on 1890 812 823 Monday to Friday from 9am until 5pm should they have any queries."

The Central Bank has been informed.

Financial expert Karl Deeter said overcharging was happening too often.

"It is typical of Irish banks to catch an overcharging issue years later," he said. "If you miss a payment they will come down on you immediately."

He said banks should be forced to repay 100 times the overcharged amount as a way of ensuring they were more alert to overcharging and then rectify the situation faster.

Irish Independent

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