Card company fined for overcharging
Credit card giant MBNA has been fined 750,000 euro after overcharging Irish customers by almost 17 million euro.
The Central Bank investigated a number of breaches in financial regulations by the lender after it admitted in September 2009 that it wrongly applied interest on accounts.
The overcharging affected 373,105 customers between July 1 2007 and October 26 2009.
It was found that MBNA charged credit card-holders interest from the date of transactions rather than from the time a statement was issued, as agreed with customers under its own terms and conditions.
The company also wrongly applied interest to accounts used solely for cash advances despite customers repaying their full balance within the agreed charge-free timeframe.
The Central Bank said MBNA failed to act in the best interests of its customers or have adequate control checks to make sure such errors did not occur. An MBNA spokeswoman said all the affected customers have now been repaid the full 16,997,321 euro in overcharges, along with any appropriate interest.
The vast majority of customers were issued a refund in March last year.
The spokeswoman added that the lender had identified the mistake and immediately informed the authorities. "We are pleased to have reached an agreement with the Central Bank on this matter," she said.
The Central Bank also found the credit card company reported its own failures and reimbursed out-of-pocket customers in a timely manner.
MBNA is part of Bank of America and is the largest credit card lender in Europe. The company spokeswoman declined to say how many customers it has in Ireland.