Credit card company MBNA is to refund around €18m after mistakenly overcharging some customers. Hundreds of thousands of customers were affected.
The company said it had identified a mistake in the way the charging of interest was described to customers in its credit card terms and conditions.
MBNA said that, although it had applied interest as outlined in its marketing material, there was 'a drafting error' within its terms and conditions from 2007. This meant that it applied interest to some accounts where its own terms and conditions prevented it from doing so.
The company then conducted a full review of accounts going back to 1997, which uncovered another error. MBNA said it would refund any interest which may have been applied on the annual Government Tax charged on accounts up to 2007, as it did not set out how this interest would be applied.
MBNA said it was now assessing the impact on customers. It said this would be a lengthy process, but it hoped to refund affected customers by March 2010 at the latest. It said the refund to most of the affected customers was likely to be around €38 or less.
The company said the error had been reported to the Financial Regulator and the relevant terms and conditions had been corrected.
