Bank customers to get back £149m in charges - Credit cards - News - Moneyfacts

News

Bank customers to get back £149m in charges

Bank customers to get back £149m in charges

Category: Credit cards

Updated: 26/03/2014
First Published: 26/03/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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.

What Next?

Check out our pick of the top loans using our easy-to-use loan calculator

Keep your borrowing costs to a minimum with our whole of market credit card search

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Top credit cards for Christmas spending

‘Tis (just about) the season to be jolly, but before all that festive fun begins, chances are you’ve got a bit more shopping to do. But, if you’re turning to credit to fund things, you’ll want to use cards that offer 0% interest deals on purchases.

Spooky reality of high balance transfer fees

Credit card debt is scary at any time of year. While most might assume that opting for the longest deal on offer would save them the most, our data shows some of the longest deals can actually work out to be the most expensive.

Reward credit cards that become ‘pointless’

If you regularly use cards to pay at the till, you may have considered opening a reward credit card to earn points every time you spend. However, not all of these cards are as rewarding as they may seem…
 
Close