SOME 50,000 Halifax customers – the vast majority of the bank’s credit card customers – have been overcharged on credit card interest rates, the lender said yesterday.
The average refund to customers affected will be €5. In total the bank will be reimbursing about €260,000 to customers as a result of the errors, which were identified last September. It is understood that more than 90 per cent of Halifax’s credit card customers have been affected.
Customers received letters yesterday stating that errors had been identified “in the application of interest” to credit card accounts. They were told that they will be refunded on January 27th and that Halifax has taken “all necessary steps to ensure that these errors do not happen again”.
A spokeswoman for Halifax said the errors had been identified internally last September when it emerged that an incorrect interest rate had been applied to cash advance transactions between September 1st and 14th last year. “Cash advance” transactions refer to cash withdrawals made with a credit card.
Following the discovery of the error, the lender undertook “ a full review of the company’s interest charging processes” according to the spokeswoman, focusing on the three occasions when interest rate increases occurred since the credit card was introduced in 2006: January 1st, 2009; February 1st, 2009; and September 1st, 2009.
It was discovered that customers had been charged the higher rate of interest two weeks too early, resulting in extra charges being levied.
The spokeswoman said the Financial Regulator had been contacted the day the error had been identified and that Halifax had been working closely with the Financial Regulator to resolve the issue.
A spokeswoman for the Financial Regulator could not confirm whether Halifax would face penalties or sanctions arising from the incident. However, she confirmed that, under the Financial Regulator’s statutory consumer protection code, any breach of a legislative provision or regulatory requirement which gives rise to a pricing or charging issue may be considered under the regulator’s administrative sanctions procedure.
The Financial Regulator can take a number of actions, from cautions and reprimands, up to and including monetary penalties.
