Thousands of AIB customers are to receive refunds after the lender charged stamp duty for credit cards that had already been cancelled, in some cases years previously.
The bank wrote to customers caught up in the issue in the last week notifying them of the error. It is understood that close to 10,000 customers have been affected, with an average payout of about €90. That would imply a total cost of some €900,000. Customers will not have to take any action to get the refund, which will be automatically sent to their accounts.
Stamp duty is charged at €30 per year.
“We recently apologised to some customers and told them that we continued to charge government stamp duty in error when they no longer had a valid credit card on their credit card account. We have now provided these customers with a refund,” said the lender in an emailed response to questions.
One letter to a customer, seen by The Irish Times, details how the bank charged stamp duty on a credit card account that had been cancelled in 2014 for at least one more year.
“We continued to charge government stamp duty to your credit card account even though you no longer had a credit card,” the bank’s head of payment and card products Alison McCormick wrote in the letter. AIB’s repayment “includes a refund of government stamp duty, any additional fees and interest we charged you connected to this error, where applicable, and compensatory interest”, added Ms McCormick.
The bank is writing to customers separately if the overcharging affected their credit record. For now, it expects it did not affect most customers’ credit history, according to a web page it has set up answering several frequently asked questions about the issue.
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The bank has informed the Central Bank of Ireland and has “updated our internal procedures and put additional measures in place to ensure that this does not happen again”, it said.
This is not the first time AIB has had issues with stamp duty on credit cards. In 2009, it reportedly refunded more than €260,000 to close to 4,000 customers who had been charged the tax on their credit cards despite not being resident in Ireland at the time.
The refunds come six weeks after AIB said it grew its income and loan book as the firm continued to build on the momentum seen in the first half of 2024.
In the nine months to the end of September, the bank said total income rose 7 per cent over the first nine months of the year, driven by a 12 per cent rise in net interest income. This was partly due to higher interest rates, which remain although the European Central Bank has moved to cut rates in the past few months, and increased loan volumes. It is forecasting net interest income for the year to top €4 billion.
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