MBNA has overcharged its customers by €18m!

BrendanBurgess

MBNA has announced today that it is refunding €18m to its customers.

I have issued the following press release

Financial Regulator must arrange independent supervision of MBNA overcharging.

Brendan Burgess, consumer advocate, today called on the Financial Regulator to make sure that there is some independent oversight of MBNA’s refund of credit chard overcharging.

It is not as simple as refunding interest charged and interest on interest.

The interest on the overpayment must be refunded at the same rate which MBNA charged on their arrears.

MBNA imposes very high penalties on people who have been in arrears. These penalties are among the highest charged by Credit Card companies in Ireland and include

Increasing the interest rate from 14.9% to 25%
Overlimit fees of €12.70 each time you go over the credit limit
Late fee charges of €15.24 for not meeting the minimum repayments
A returned payment charge of €19.05

Some people find it impossible to avoid these charges

They don’t appear to highlight the actual charges on their website.

If the overcharging has caused people to fall into arrears, then the penalties and charges associated with going into arrears will have to be refunded as well.

The company also is very aggressive in pursuing arrears calling customers up to 18 times a week. Posters on Askaboutmoney.com have described themselves as being “tortured” and “stalked” by MBNA. One person reported being called 6 times a day.

If these customers fell into arrears due in part to MBNA’s own errors, then they should get compensation for the aggravation they suffered.

MBNA has recently introduced new terms and conditions which make it much more difficult for customers to qualify for an interest free period. In summary, a customer must pay the balance in full and on time for two months in a row to avoid interest charges – all other credit card companies restore the interest free period as soon as the customer pays the bill in full and on time, once only.

Brendan Burgess





MBNA provides credit cards on behalf of
Ryanair.com
EBS
AXA
Sony
PigsBack.com
Irish Nurses Assoication
Irish Farmers Association
Postbank
DSPCA
Liverpool Football Club
Celtic Football Club
Munster Rugby Credit Card
Dublin GAA

ElectraBlue

I am one of the ex-MBNA card holders due a refund going back to 2002/03/04.

I closed my account in 2004, refusing to pay my final bill as I discovered that I was charged the government fee 3 times in 15 months, plus interest and arrears on same. I was also charged late fee more than once although I had paid that month - after I missed a month because my direct debit instructions were not processed in time - they claimed I needed to make two payments as the computer recorded my payment as 'belonging to the previous month'(!) I challenged them on all of this even got credit ombusman involved - sent in my complaint etc but heard nothing from them. When I called I was told they had closed my account and written my 'debt' off but I never got the refund that I was due. I let it go, as I read about other people being harrassed by them and considered myself 'lucky'.:rolleyes:

I am shocked that it wasn't just me... 18 MILLION??!! Still have all my documents and MBNA bills! Will be writing in for my refund now... PLUS 5 years interest. :mad: :mad: :mad:

BrendanBurgess

Hi Electra

Have you checked your credit record with the ICB?

If they wrote off your debt, they may have registered it and you might not find out about it until you apply for a loan or credit card somewhere else.

IrishTonyO

They may have announced it, but the only place there is anything about it is on news and newspaper sites, nothing on the MBNA site. No where to go to find out any details etc. and as usual with MBNA, there are no email addresses for them so you can't contact them that way, you have to telephone them.

ElectraBlue

BrendanBurgess wrote: »

Hi Electra

Have you checked your credit record with the ICB?

If they wrote off your debt, they may have registered it and you might not find out about it until you apply for a loan or credit card somewhere else.

Hmmm, I've got loans and mortgages since then with no problem... but I will check it out now.

Can't believe they are still only accessable via a phone number Tony :mad: I complained about that back then too as I can't use the phone due to my deafness and they refused to take my call via a 3rd party (another person calling on my behalf) which made it even more difficult.

Liam79

Hey Brendan, saw you on the news!!



Brendan i am one of the MBNA "victims"
Have a Ryanair and a One Direct MBNA CC.

Can i trust them to rectify it and let it happen, or do I need to get on to them?

Liam

BaZmO*

ElectraBlue wrote: »

I closed my account in 2004, refusing to pay my final bill as I discovered that I was charged the government fee 3 times in 15 months, plus interest and arrears on same.

Something similar happened to me too. I only got the MBNA card so I could transfer my CC debt (0% interest on the first 6 months) until my SSIA matured. Once I received their card they told me that I couldn't transfer the full amount. Kept the card for about a year and then rang to cancel it. I asked if I needed to send in a letter to confirm cancellation and the girl said that I didn't need too. Stupidly I never took the persons name. I cut up the card and threw it in the bin.
The following year I receive a statement from them with the Government Tax on it. Rang them and told them I had cancelled it and got totally brushed off. They kept telling me they had no record of me cancelling it (why o why didn't I get a name!!). So ended up having to take the hit again.

Doubt I'll be compensated though.

BrendanBurgess

Liam79 wrote: »

Brendan i am one of the MBNA "victims"
Have a Ryanair and a One Direct MBNA CC.

Can i trust them to rectify it and let it happen, or do I need to get on to them?

Hi Liam

It's difficult to tell at this stage.

Did you pay interest on your CC? If you didn't pay interest, you weren't overcharged.

They say that they will have refunded everybody by March.I think you have to wait for them to contact you.

You should ask to see a copy of the schedule setting out the calculation.

You should challenge the following if you paid any of them:
Penalty interest (25% instead of 15%) for being in arrears
Missed payment fine - might be difficult if you made no payment, but you could get a refund if you missed the minimum by just a little.
Late payment fine (might be difficult if you made no payment at all)

If you were harassed by them with multiple phone calls for being in arrears, where the arrears may be due to their overcharging, then you would have a case for compensation.

Brendan

Liam79

BrendanBurgess wrote: »

Hi Liam

It's difficult to tell at this stage.

Did you pay interest on your CC? If you didn't pay interest, you weren't overcharged.

They say that they will have refunded everybody by March.I think you have to wait for them to contact you.

You should ask to see a copy of the schedule setting out the calculation.

You should challenge the following if you paid any of them:
Penalty interest (25% instead of 15%) for being in arrears
Missed payment fine - might be difficult if you made no payment, but you could get a refund if you missed the minimum by just a little.
Late payment fine (might be difficult if you made no payment at all)

If you were harassed by them with multiple phone calls for being in arrears, where the arrears may be due to their overcharging, then you would have a case for compensation.

Brendan

Thanks for that Brendan

Regularly pay lots of interest....!!
But have never missed a payment....

Liam

IrishTonyO

Got a letter in the post from MBNA today regarding this, but no new information in the letter than was the on the news or in the papers.

LauranceB

Same here. Not much in the letter; well nothing that we haven't heard already.

Good points Brendan.

groovyg

My sister had a card with them and while she managed to pay the minumum payment every month there were a couple of occassions where she missed it and got a hefty charge applied for late payment.
In September she cleared the card and closed the account. She got a letter a few days later confirming the account was closed.

Then two months later she got another letter for a bill for over €45 saying "A payment has not tbeen received and a late fee has been applied to your account"

When she queried it they said that the government tax had been applied which I found really strange as the account was closed. They said the fee was for Government tax which is usually taken off your card in April and it covers the year previously as opposed to the year ahead and since she closed the account in September they were taking the tax off her card in advance for the period 09/10. I didn't really understand it.

They never sent her a statement to notify her of this, they just billed a letter two months later and added on a late fee. She ended up paying it just to be done with them.

Yesterday - what arrives in the post? another letter from MBNA re overcharging. Unbelievable shower of wasters

BuffyBot

That doesn't mean she was overcharged in the way this issue occured.

Why *shouldn't* they send her the general information letter in this scenario?

Jibberjab

Hi Brendan, saw your report on MBNA on news.

Do you think that it is possible that these are scams that are deliberately planned by banks and credit card companies ? The reason I ask is that for years I have been meaning write about An Post Prize Bonds. I'll explain that in a few minutes. Just think MBNA has been taking this money since 2007 and they have supposedly only discovered the error now. In the meantime, they can take those millions, put them into another bank account and make many millions more in interest from them or they can gamble the money on buying shares and then when they have made enough - they can announce the error they have made - supposedly ???? What do you think ??

About the An Post Prize bonds - for years I have thought about how strange it is that they have been selling those bonds since the 60's I think, if not longer. Many people die before they ever claim back their prize bonds or cash them in. An Post can take all this money and again make millions in interest etc on it. The amount of prize bonds they have on their books is so large because it is going back so many years, that people buying them today have very little chance of winning big. An post knows that most of the old prize bonds will never be cashed in and so they say nothing about this.

As for the national lottery is there any way that people can check exactly where all that money is going ?? Do the financial regulators check that ??
How come KPMG have been used from the start to witness the draws, isn't it time they changed around who they get as witnesses ? Every part of Ireland is entitled to a share of that money so can we find out who is getting it and the details of where it goes ?

Toots

Jibberjab, I don't want speculation on thread that scenarios such as this are an intentional scam by the banks. If you want to start a discussion of that nature, the Conspiracy Theories forum may be a more appropriate place for it.

Jibberjab

I am not saying that they did, I am asking is it possible ? that's all - I guess that should all be left for the Regulator to investigate. It just that this has happened before with the banks and now this company.

BuffyBot

It's easy enough for these things to go unnoticed for a long time.

A simple glitch, say a computer programmed incorrectly for example can put things out no end - and although 18 million sounds a lot, when it's spread out across a variety of cardholders and different transactions it wouldn't necessarily be easy to spot. If the programming glitch was such that it didn't cause any flashing bulbs or siren noises, it could cruise along for a while and no-one might never know.

Indeed, for any customers that did report it (and the majority wouldn't, as people tend to trust their bank/card issuer etc), it would seem like just random, isolated incident at first, especially to some agent in a call centre who might only ever take a call on that issue once in their time there. It's only when someone begins to see a pattern do these things get escalated and investigated - and by that time, it could be a considerable way down the line, even if the bug/problem is identified immediately and doesn't take time to resolve.

There is no great conspiracy, that's the way things just happen sometimes.

IrishTonyO

the main reason for it is that in their terms and conditions if the full balance wasn't paid off, they said they would charge interest from the statement date, whereas they actually charged the interest from the purchase date.

Agonist

Hi guys,

I have my statements here. I see that I paid late fees, interest, overlimit fees and government tax. I'd like to go through the statements and estimate how much my refunds will be,

A few questions. If you can direct me to somewhere that outlines the answers that would be great.

1. What are the changes in the way they apply interest?
2. What date was the mistake rectified?
3. How many days after a transaction was made should they start charging interest on it and do they start charging interest on fees as soon as they are applied?
4. Where can I find a schedule of their interest rates over the relevant time period?

Any other info would be welcome. They say people will be refunded up to €38. How can they say that already? Seems like a small figure considering that with a credit limit of €6000, one month's interest on that balance could be €30.

I'd love to create a spreadsheet that anybody could use to input their data and discover how much they are owed.

BrendanBurgess

The interest was charged from the date of the transaction instead of from the date of the statement.

So let's assume the following

Transaction date: 1 January 2007
Statment date 21 January
Amount of tranaction €1000

Interest rate 15%

The rough overcharge would be €8.21 calculated as follows:

€150 x 20 days/365 days

Now assume they refund this to you on 21 January 2010, they owe you interest on the €8.21 @ 15% for three years.

which would be a further €4.29

(Have they confirmed that they will pay interest on the overcharge at the rate they charged?)

You would have to do this for every transaction since the date the problem first started.

The overcharging could well have knock-on effects. If you cumulatively were overcharged €200 and you were €100 over your limit, you would be due a refund of the overlimit penalty.

I don't trust them to work it out properly and I don't trust the FR to make them do it properly.

CSC

groovyg wrote: »

My sister had a card with them and while she managed to pay the minumum payment every month there were a couple of occassions where she missed it and got a hefty charge applied for late payment.
In September she cleared the card and closed the account. She got a letter a few days later confirming the account was closed.

Then two months later she got another letter for a bill for over €45 saying "A payment has not tbeen received and a late fee has been applied to your account"

When she queried it they said that the government tax had been applied which I found really strange as the account was closed. They said the fee was for Government tax which is usually taken off your card in April and it covers the year previously as opposed to the year ahead and since she closed the account in September they were taking the tax off her card in advance for the period 09/10. I didn't really understand it.

They never sent her a statement to notify her of this, they just billed a letter two months later and added on a late fee. She ended up paying it just to be done with them.

Yesterday - what arrives in the post? another letter from MBNA re overcharging. Unbelievable shower of wasters

MBNA close your sister's account and then correctly charge the gov tax to the account as it was closed. They would have sent a statement to reflect this - I get my statement off them every month without any problem but also check my account online all the time to know where I stand. They didn't receive a payment on time so the next statement correctly had the balance plus a late fee charge (which is part of their t and cs). I fail to see the problem - your sister has a responsibility to ensure her payments are made on time.

matt70iu

Have a card with MBNA myself, got into trouble as I lost my job. Got a job and got back out of trouble again through reaching an agreement with them. Account now up to date, however, got one of those overcharged letters, probably due hundreds back as i've had that card since 2003, and they were ringing me 20 times a day over a few hundred...... The cheek! Think I'm gonna clear the balance asap and get rid of them!

IrishTonyO

More worryingly about this whole situation is how you can trust MBNA to refund accurately what is owed and how the hell did the financial regulator let this go unnoticed for years and why have MBNA not been fined for it.

diamondgirl

i spoke to a staff member in mbna this morning. She said the max amount refund would be 38 euro & that its from the interest on the goverment fee, its not from anything else.

Is this correct ?

CSC

diamondgirl wrote: »

i spoke to a staff member in mbna this morning. She said the max amount refund would be 38 euro & that its from the interest on the goverment fee, its not from anything else.

Is this correct ?

The average is 38 not the maximum. It's from interest on the government tax (they charge interest on the Tax but didn't clearly state it in their t & c's) and how interest is charged in general from a 07 to 09 that wasn't clearly stated in the terms. I spoke to one of their staff members in December and he explained it very clearly.

chrism2007

when i was getting off a flight a woman in a ryanair uniform asked me could i answer a few questions. i thought it was something to do with the flight or for security etc.. so i said ok

she asked me general questions like name, address etc.. and took all the info down

then she asked me how much i earned so straight away i asked whats this about?

she said she was going to send me an mbna credit card wih a 3000 euro limit :eek:

i obviously told her not to bother

cheek to not even mention it was for a credit card. im sure theres plenty of people who thought the same as me, as in it was for security or whatever.

imagine the amount of people that got those in the door, and got themselves into heavy debt

IrishTonyO

if they overcharged by €18,000,000 and the average amount per person is €38, implies they have 473,684 customers in Ireland??????

TB1809

Did anyone get a refund yet from MBNA, refunds due in March ?

IrishTonyO

No haven't heard anything yet

Beez Neez

Me neither !

Got the bog standard letter stating that they would issue a refund in March but no sign of anything yet!!

If the shoe were on the other foot betta they wouldnt let is go this long!

Speak Now

Haven't heard anything yet

Derekjames

:(:(

I havent heard a whisper from them altough they rang me 5 or 6 times on the 1 day about two weeks ago as I was in arrears of about €70 euro.

First time it happened to me and I learned my lesson all paid now, There
collection activity seems to be quite ruthless and rude as I pointed out to them, I think they have a call centre in sunnier climes as well as a foreign
speaking gent rang me after I outlined that i basically fell behind and would have it clear in a week he insisted on going through his usual call centre questions, though i clearly outlined i was paying it, My child was crying in the background and when i pointed out that i would be tending to the child as that was my priority he totally ignored me and went through his questions again I nearly went mental.

I have since closed my account because of his behaviour and will never again darken there door I pity anyone in a lot of debt with them

am looking forward to my refund although not expecting much sorry for the rant above altough feel much better know ha ha!!!!

brianwalshcork

My statement date is March 16th, I can see online that there were three transactions on the 17th of March:
REFUND INTEREST GOVERNENT TAX
COMPENSATORY INTEREST
REFUND INTEREST
with a posting date of March 20th.

testicle

Yeah, mine came back also, a refund of approx €160

Lux23

And do they just put this straight into your account? What if you have a zero balance, do they send you a cheque then?

patrickc

i got mine also, in the region of 90euro

Speak Now

I closed my account last year so will i get a cheque or will it slip through the net

another world

yep, refund gone through

therecklessone

Almost €200 in total.

IrishTonyO

Got a call last week saying there was fraudulent activity on my card and they cancelled it and are sending out a new one, so cannot check at the moment. I just hope they transfer my refund to my new card.

partyguinness

Just got this month's statement....€134.96 refunded in interest..:)

partyguinness

Derekjames wrote: »

:(:(

I havent heard a whisper from them altough they rang me 5 or 6 times on the 1 day about two weeks ago as I was in arrears of about €70 euro.

First time it happened to me and I learned my lesson all paid now, There
collection activity seems to be quite ruthless and rude as I pointed out to them, I think they have a call centre in sunnier climes as well as a foreign
speaking gent rang me after I outlined that i basically fell behind and would have it clear in a week he insisted on going through his usual call centre questions, though i clearly outlined i was paying it, My child was crying in the background and when i pointed out that i would be tending to the child as that was my priority he totally ignored me and went through his questions again I nearly went mental.

I have since closed my account because of his behaviour and will never again darken there door I pity anyone in a lot of debt with them

am looking forward to my refund although not expecting much sorry for the rant above altough feel much better know ha ha!!!!

I went through the same grief last year...when they rang (3-4 times a day) looking for personal details re date of birth etc to verify my identity...I refused to answer and then asked the caller for his date of birth and asked him to verify his identity and that I could not state personal details over the phone to a stranger....:D...he just hung up stating that it was obviously not a good time for me and he would call back...

GerardKeating

brianwalshcork wrote: »

My statement date is March 16th, I can see online that there were three transactions on the 17th of March:
REFUND INTEREST GOVERNENT TAX
COMPENSATORY INTEREST
REFUND INTEREST
with a posting date of March 20th.

Same here, transaction date 02/03/2010, posting day is 20/03/2010.

No actually contact from them, but the money is welcome, well timed.

John Mason

i got a letter from MBNA saying they had overcharged me.

i have since cancelled the card, does this mean that i wont get my refund?

Speak Now

irishbird wrote: »

i got a letter from MBNA saying they had overcharged me.

i have since cancelled the card, does this mean that i wont get my refund?

I'm in the same boat. Got the letter after i had cancelled, assume we'll hear something in the post eventually.

IrishTonyO

Got my new card today and couldn;t wait to check online what my refund was after seeing the large amounts here, mine was €23 Must have been much better with my credit card than I thought

tc2010

just got a refund of 75 euro

must be hitting them hard with so many refunds. not that i feel sorry or anything but who will feel the impact of that in the end? hopefully theres no job losses

edit

after reading the previous refund amounts i had to laugh

i thought i was bad spending 6 grand on a credit card

gladly that 75 quid is the last of my credit card debts. i only had 75 left on it

partyguinness

MBNA are one if not the biggest credit card issuer in the world and owned by Bank of America...MBNA could buy this entire country several times over...dont think they will be losing too much sleep over €18m in pixieland...:D

newtogame

We have had a credit card with MBNA for 8 years and would pay off balance in full every month.I forgot to pay twice in that period and the charges were hefty.I was two days late last month and then made the payment in full and the whole thing cost me 50 euro.When I rang to see why the charge was so high they told me that I lost my entitlement to the 58 days interest period for the following month !Are they having a laugh???I am going to close the account but wonder what the downside would be in clearing the balance less the penalty charges.I am furious with them and myself too for allowing this to happen.We spend about 25k per annum with our credit card.Hope they will feel the pain!!!!They also have such rude staff it is unreal.

3DataModem

I got 507. Mental. Definitely a mistake as I rarely paid interest.... but I cashed the cheque and they can whistle if they want it back!

Speak Now

3DataModem wrote: »

I got 507. Mental. Definitely a mistake as I rarely paid interest.... but I cashed the cheque and they can whistle if they want it back!

Nice one a cheque i assume you're not a customer anymore then
i might see something yet so :cool: