Credit cards Updated:
Consumers often find themselves unwillingly handing money over to banks and building societies in the form of charges, fees and interest on their borrowing, so it's always a boost when they're able to get something back.
Well, now they can – thanks to a report from the Office of Fair Trading (OFT) finding that a lot of lenders were in breach of the Consumer Credit Act, an estimated 497,000 customers will get money straight back in their pockets.
The report found that 17 banks and building societies didn't provide customers with some of the necessary information about the credit agreements they were entering into – information which is required under the rules of the Consumer Credit Act 1974, which clearly put them in breach of regulation.
A lender isn't allowed to collect interest or default charges during any period when it's failed to comply with the necessary requirements. The interest and charges in question apply to the likes of store cards, loans, credit cards and hire purchase agreements, and a lot of customers have been paying such charges despite their lenders failing to comply with the Act. That means they could be in line for a windfall.
David Fisher, senior OFT director for consumer credit, said: "'These issues were not deliberate misconduct, but the institutions concerned should have ensured they were complying with the law. The OFT welcomes the proactive steps taken to return money to customers where it was incorrectly charged."
The amount of money to be repaid is expected to total some £149 million, and you won't need to take any action just yet as your bank or building society will contact you directly if your agreement was affected.
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