European Student Services, a company which arranges tax refunds from abroad for students, has recently had to ask a number of its clients to return hundreds of pounds of overpaid tax refunds.

The misunderstanding with the amounts of money allocated is due to delays in German tax offices at certain times of the year.

ESS has an arrangement with the Bank of Ireland whereby a six-month interest-free overdraft given to a student will be repaid when the tax refund arrives.

ESS claims that when it found out that there was a delay with a number of German tax refunds, and that the overdraft would not be cleared within six months, it wrote to the people concerned.

The ESS arranged that it would pay off the overdraft so that the students wouldn't have to pay interest. Melissa O'Neill from the ESS says the students involved signed an agreement that they would pay back the money to the ESS once they received it from the German government. However, she says, its seems that "some signed without reading the agreement".

According to the ESS, only three or four such cases happen out of the 7,000 or 8,000 individuals dealt with every year.

One student who was entitled to a tax refund from summer work in the US and Germany contacted the ESS to reclaim her tax. An overdraft was arranged with the Bank of Ireland, which was paid off when the money was reclaimed from abroad. She says she didn't take much notice of what money was going into her account, as she was in her final year and doesn't remember signing anything. She was disappointed to find out recently that she owes £300.

The moral of the story: read the fine print.