MBNA fined for €17m overcharging

ONE of the country’s leading credit card lenders has been fined by the Central Bank after overcharging its customers by €17 million.

MBNA Europe has been hit with a €750,000 fine after charging more than 370,000 of its Irish-based customers more interest than necessary. All instances occurred over a two-year timeframe, between early July 2007 and late October 2009. In all, some 373,105 customer accounts were affected and overcharged by a combined €16.99m.

“The systems and controls breaches arose because the firm failed to ensure that there was consistency between the firm’s systems and the terms and conditions. It’s noted that although controls existed in respect of the review process, these controls weren’t effective and resulted in the overcharging occurring,” the Central Bank explained yesterday.

The Central Bank learned of the matter — viewed as being a breach of the regulatory requirements contained in the Consumer Protection Code — in September 2009, after being notified by MBNA itself. It said that the €750,000 fine and a reprimand were appropriate sanctions because of a number of reasons — including MBNA reporting its failures in a timely manner, co-operating with the resolution of the matter and paying back all affected customers with appropriate levels of interest.

“The penalties imposed in this case reflect the importance the Central Bank places on consumer protection and the requirement to have adequate systems and controls in place to ensure compliance with the requirements of the code,” the Central Bank added.

It also said that despite previously publicising its concerns about overcharging, it continues to see instances of firms having “inadequate systems and controls” in place.

“Dealing with issues relating to the overcharging of customers has been identified as a priority area for the Central Bank”.