AIB fined record €2 mil­lion for over­charg­ing cus­tomers

The Pak Banker - - Company & Boss News -

DUBLIN: Al­lied Ir­ish Banks (AIB) has been fined €2 mil­lion by the Cen­tral Bank - the largest fine in Ir­ish re­tail bank­ing his­tory - af­ter it was found to have over­charged sig­nif­i­cant num­bers of its cus­tomers over a pe­riod of sev­eral years.

The bank also failed to in­tro­duce proper sys­tems to no­tify them of the ir­reg­u­lar­i­ties and to is­sue re­funds on a timely ba­sis.

In re­leas­ing de­tails of the fine, the Cen­tral Bank also expressed con­cern that some of the State's fi­nan­cial in­sti­tu­tions "con­tinue to ex­pe­ri­ence con­trol fail­ures that re­sult in cus­tomers be­ing over­charged and that the time­frame for the res­o­lu­tion of these er­rors and mak­ing resti­tu­tion to cus­tomers can be un­duly drawn out".

It said AIB had been in breach of the Con­sumer Pro­tec­tion Code, which out­lines how all banks must deal with con­sumers, over sev­eral years, and had breached the code in three dis­tinct ways.

It found 258,000 cus­tomers had been over­charged an av­er­age of just un­der €100 each. There had been an un­ac­cept­able de­lay in no­ti­fy­ing cus­tomers of the over­charg­ing and in is­su­ing re­funds. It said the bank did not have in place ad­e­quate sys­tems and con­trols to en­sure com­pli­ance with the code when it came to in­form­ing cus­tomers about re­funds due.

It also said the bank had failed to en­sure that cus­tomers who bought credit card pay­ment pro­tec­tion in­surance but sub­se­quently changed their minds were not charged fees.

"These fail­ures to pri­ori­tise and di­rect ad­e­quate re­sources to the rec­ti­fi­ca­tion of the is­sues iden­ti­fied has re­sulted in un­due de­lays in resti­tu­tion to af­fected cus­tomers," the Cen­tral Bank said. It said AIB had failed to put in place "ro­bust gov­er­nance ar­range­ments specif­i­cally by fail­ing to have ad­e­quate in­ter­nal con­trol mech­a­nisms to pre­vent and rec­tify fre­quent and many in­stances of over­charg­ing".

Ac­cord­ing to the Cen­tral Bank, most of the af­fected cus­tomers have been re­funded with ap­pro­pri­ate in­ter­est and the bank had "un­der­taken to re­pay, with ap­pro­pri­ate in­ter­est, all those out­stand­ing amounts that have not al­ready been re­paid".

It said the fine re­flected the num­bers of er­rors in­volved, the amount of money in­volved and the num­ber of con­sumers af­fected.

NCB Stock­bro­kers was fined €100,000 and rep­ri­manded as a re­sult of in­cor­rect re­port­ing of some of its trad­ing ac­tiv­i­ties. The Cen­tral Bank said the breaches were un­in­tended and added that once the firm be­came aware of them, it quickly un­der­took re­me­dial steps, and sub­mit­ted all trans­ac­tion re­ports cor­rectly. -PB News

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