Bank of America's credit card firm
MBNA has fined €750,000 by Irish Central Bank for overcharging customers €17m.
Over 370,000 customers were
overcharged almost €17m between July 1st and October 26th 2009 after the company
wrongly applied interest rate charges to some credit card accounts from the
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 is noted that although controls existed
in respect of the review process, these controls were not effective and resulted
in the above detailed overcharging occurring.
In deciding the appropriate penalty to
impose, the Central Bank took account of mitigating factors:
the firm reported these failures in a
that all affected customers were
remediated by the firm, with appropriate interest, in a timely manner; and
the co-operation of the firm during the
course of the resolution of the matter and in settling at an early stage in
the administrative sanctions procedure.
Director of Enforcement, Peter
Central Bank has previously highlighted its concerns relating to control
failures that result in customers being overcharged. Overcharging of
customers is highlighted as a priority area for the Central Bank in our
Enforcement Strategy, and we will continue to focus resources to help
achieve acceptable standards across all industry sectors. We will take
enforcement action against regulated entities which fall short of the
required standards and their customers legitimate expectations.
Terms of Business is an important document in
which the firm is required to clearly set out the basis upon which it will
conduct its business. Firms should review their Terms of Business regularly
to ensure that it accurately reflects the terms upon which services are
provided. Firms should also monitor and test their internal control systems
regularly to minimise the potential for errors and ensure that errors, if
they do occur, are readily and promptly identified and remediated."