Barclays to refund 300,000 customers after admin error
Bank to pay back loan customers thought to have been mistakenly charged interest
Tuesday 17 September 2013
Barclays Bank is to pay out up to £100 million to around 300,000 of its personal loan customers after making mistakes on their paperwork.
The customers could be inline for a few hundred pounds each after they are believed to have been incorrectly charged interest. The issue dates back to October 2008.
The mistake comes after the bank revealed it is facing a £50 million fine over claims it acted “recklessly” in its multibillion pound bailouts from Qatar in 2008.
A spokesman described the latest problem, which relates to arrears notices and statements, as “technical documentary errors”.
The issue was revealed in a 185-page bank document in which Barclays stated it “identified certain issues with the information contained in historic statements and arrears notices relating to consumer loan accounts. It is therefore implementing a plan to return interest incorrectly charged to customers”.
A spokesman for the bank said, “Barclays has proactively reviewed information it has historically sent to its customers relating to interest charges where we have found technical documentary errors.
“As a result Barclays has identified certain issues with the information contained in some statements and arrears notices relating to consumer loan accounts.
“Due to these notification errors, interest was not due on certain accounts during the period that Barclays made this mistake, and whilst no one has been mis-sold to, customers are entitled to have their interest payments returned. No customer will pay more than they were ever contractually expected to.
“Barclays has notified the Office of Fair Trading (OFT) which is responsible for consumer credit issues and is implementing a plan to return interest payments to customers as swiftly and efficiently as possible.
“Barclays is undertaking a review of all its businesses where similar issues could arise to assess any related issues.
“Any affected customer will be contacted by Barclays and customers do not need to take any action.”
The issue is similar to one made by Northern Rock Asset Management, which announced last year that it would return interest paid by 152,000 borrowers as a result of mistakes in paperwork.
Barclays is facing further complaints after the Financial Conduct Authority (FCA), the recently created regulator, accused it of agreeing £322 million of secret payments to Middle Eastern investors to secure their support for cash calls totalling more than £5 billion at the height of the financial crisis.
The bank contests the FCA's findings and said the fees relate to advisory services over five years.
It is also being probed by the Serious Fraud Office and regulators in the US, and admitted it does not know how much the final cost will be.
The bank has also been implicated in attempts to manipulate Libor, the inter-bank lending rate, for which it was fined a total of £290 million.
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