Banks face tough week under spotlight

THE country’s high street banks are this week facing a triple whammy of further embarrassing revelations over shoddy and cavalier practices.

In the first blow of another bad week for three of the country’s four major banks, Bank of Ireland (BoI) yesterday refunded €1.8 million in fees to credit card customers.

Tomorrow, the High Court will decide if the final report of a six-year investigation into the affairs of National Irish Bank (NIB), particularly offshore investment schemes, may be published, wholly or in part.

And on Friday, AIB is expected to publish its report into overcharging on certain foreign exchange transactions. The investigation was launched earlier this summer after details were revealed by the media.

BoI’s €1.8m refund follows a High Court decision handed down in favour of Director of Consumer Affairs Carmel Foley last year.

The refunds will be made to its Business On-Line and American Express Blue credit card customers and relate to fees that include monthly subscriptions, transaction charges, as well as late payment charges and over-limit fees.

When the bank introduced the cards, Ms Foley held the commercial justification for the proposed charges was unproven and made them subject to review.

“When the time for the reviews arrived, the Bank of Ireland questioned my powers and failed to co-operate with the review process,” said Ms Foley yesterday.

“As a result in July 2002, I directed the bank to refrain from imposing charges on customers for these services and when it refused, I used my powers to initiate High Court proceedings.”

In March 2003, Mr Justice Peter Kelly ruled that the bank withdraw the charges with immediate effect, a decision that compelled BoI to make a new application to the Irish Financial Services Authority in respect of the charges. Its application eventually succeeded. Yesterday’s repayment relates to charges imposed before March 2003.

“I am very disappointed that legal action was necessary to compel the bank to act responsibly and refund the charges which it was directed to refrain from imposing in July 2002,” said Ms Foley.

Separately, Mr Justice Kelly yesterday said he would rule tomorrow on who should receive copies of the High Court-appointed inspectors report into NIB.