Barclays to pay out refunds after personal loan rate errors

Rights, Scams and Politics

Updated on 17 September 2013 | 1 Comment

Around 300,000 customers who took out personal loans are set to receive payouts following mistakes in statements and arrears notices.

Barclays is set to pay out interest refunds to around 300,000 personal loan customers after uncovering mistakes in its paperwork.

The mistakes date back to October 2008 and are expected to cost the bank around £100 million.

In a prospectus for a new issue of shares, which Barclays hopes will raise £5.8 billion, it cited “certain issues with the information contained in historic statements and arrears notices relating to consumer loan accounts”. The mistakes had also been mentioned in the company’s annual report back in February.

The statements did not comply with standards set out under the Consumer Credit Act. Therefore, interest is not allowed to be charged. Around 152,000 Northern Rock customers received refunds after a similar mistake was uncovered last year.

A spokesperson said: “Due to these notification errors, interest was not due on certain accounts during the period that Barclays made this mistake, and whilst no one has been mis-sold to, customers are entitled to have their interest payments returned. No customer will pay more than they were ever contractually expected to.”

The prospectus goes on to say that investigations are ongoing in “all its businesses where similar issues could arise, including Barclaycard, Barclays Wealth and Barclays Corporate”.

Barclays says any affected customer will be contacted by the bank and interest payments will be returned “as swiftly and efficiently as possible”.

The bank is also facing a potential £50 million fine from regulator the Financial Conduct Authority for allegedly agreeing secret payments with Qatari investors in 2008

It has already paid £290 million in fines for attempting to manipulate the Libor market interest rate and has set aside £850 million to compensate businesses that were mis-sold interest rate protection products.

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