AIB to repay €1.4m after student fees blunder

AIB is to pay back €1.4 million to 34,000 third-level students after ongoing investigations into overcharging at the bank found fees were wrongly levied on student accounts.

AIB said last night that advertised discounts, which were available to full-time students and graduates, were not applied in all cases dating back to the 1990s.

AIB also disclosed that €400,000 in fees were not charged to some former student and graduate customers who received discounts for longer periods and for larger amounts than advertised.

The bank said it will not seek to recover the €400,000 involved.

"AIB confirms that it is in a position to identify most cases where the discounts were not applied and that refunds will be made as soon as possible," the bank said in a statement issued after the latest scandal was revealed by RTÉ.

The President of the Union of Students in Ireland, Ben Archibald, said he accepted AIB had made a bona fide mistake.

"It is not our job to go kicking the bank but AIB needs to apologise and convince students that the necessary procedures have been put in place to ensure that this does not happen again."

The latest overcharging incident came to light as a result of investigations demanded by IFSRA following the discovery that customers were overcharged €25m in foreign exchange fees. It is understood up to a dozen other serious irregularities have been uncovered as a result of independent investigations by accountants from Deloitte.

The probes, expected to cost €25m, are being carried out under the supervision of former Auditor and Comptroller General Lauri McDonnell.

The investigations, which are being paid for by AIB, are examining the foreign exchange and other possible overcharging as well as the automatic payment of mortgage protection cover without customers' consent.

In May it emerged that Bank of Ireland had refunded €390,000 to 35,000 second-level students who were incorrectly charged the €10 Government stamp duty on ATM cards. The bank said it had stopped paying this tax for students when the Government increased stamp duty in the 2002 budget. The bank said it had notified students of the change but conceded it did not give the required 14 days notice and therefore refunded the money.