Thousands to get refunds after being overcharged interest on credit cards

Irish Independent

21-05-2025

Avant Money said it had identified what it called an 'administrative error' that led to 4,200 of its card customers paying too much interest.
In what is just the latest instance of overcharging by financial institutions in this country, Avant Money has written to customers affected.
One customer, a risk manager from Co Meath who does not want to be identified, said he got an email out of the blue telling him he was due a refund of €544.48.
This was to cover 'any excess ­interest charged, including compensatory interest is due to you', the email said.
'I thought it was a scam at first as I haven't had an Avant Money card for four years.'
This meant that these customers had an incorrect interest rate applied to cash transactions
He contacted a colleague he knows uses an Avant credit card and his colleague told him he also got an email from the card provider, and had been advised to expect a refund and compensation totalling €340.
Contacted by the Irish Independent, Avant Money said: 'In March, we self-identified an administrative error affecting the interest rate on a number of customer credit card accounts following an internal review.
'This meant that these customers had an incorrect interest rate applied to cash transactions for a period of time.'
It said around 4,200 customers had been
affected by the interest rate ­issue, with an average refund amount of €20.43.
Asked whether the Central Bank had been informed about the overcharging, Avant confirmed it did tell the regulator.
'While the error was resolved ­within the required regulatory timeframe, meaning there was no obligation to notify the Central Bank, we have chosen to do so as a courtesy,' the bank said.
The Central Bank said it could not comment on its supervisory engagement, but continued to engage with the firm.
It said it expected all regulated firms to have adequate systems and controls in place and where issues that ­affected customers arose, they should be addressed and rectified, with the overarching objective of protecting customers' interests.
Last month, Avant Money revealed it is now a fully licensed bank in this market.
It is keeping its Avant Money name for now, but is expected in time to change to the Bankinter brand, the name of its Spanish parent company.
Just before Christmas, the Central Bank issued data showing up to 400,000 consumers in Ireland are needlessly paying some of the highest interest rates on their credit cards.
It said these people were paying rates of more than 23pc, when they could sign up for cards with much lower charges.
Since 2022, legislative changes have meant new credit card accounts cannot have an annual percentage rate (APR) of more than 23pc.
But a review by the Central Bank of Ireland has found that, of the approximately 1.3 million credit card accounts in Ireland, more than 400,000 are on higher APRs that pre-date this legislation.
Meanwhile, there have been a string of overcharging issues by banks and non-bank lenders recently.
Last November, it was disclosed that tens of thousands of homeowners with mortgages originally from Ulster Bank would be compensated after a blunder meant they were overcharged interest.
The mortgages have been sold to AIB, PTSB and vulture funds.
Some of the affected customers have since redeemed their mortgages. About 90,000 former Ulster Bank mortgage accounts were wrongly charged.
Last May, AIB had to apologise for a second blunder in its handling of mortgages it bought from Ulster Bank.
In February last year, Pepper Advantage admitted an error in its repayment process, which has led to repayments for about 2,500 borrowers being lower than they should be.