Banks facing another round of payouts to thousands of customers?

fuzzgun19

I saw this on the news yesterday, and wondered what it's all about. I couldn't find anything already on here.

http://www.itv.com/news/2014-03-20/are-you-entitled-to-a-repayment-from-your-bank/

A string of Britain's banks and building societies are facing another round of payouts to hundreds of thousands of customers.
Bank and building society customers are entitled to clear and timely information. But a series of errors in the industry means that tens of thousands of customers did not get it.
Under consumer credit law a lender is not entitled to recover interest or default charges from you if it has failed to comply with these regulations. So once again its payback time for customers.

• £149m will be repaid
• to 497,000 customers
• but this is on top of £370m in repayments already made by banks, which I understand to including Barclays, Northern Rock and Co-Op

The Office of Fair Trading does not name and shame in these circumstances, because officials deem that the banks and building societies have not done this on purpose - it was an error.
But worrying nevertheless that these appear to have been quite so widespread and that so many customers have been charged incorrectly. The mistakes centre on the obligation of lenders to provide timely notices of arrears and annual statements.
So what should you do if you think you may be entitled to some of this repayment - officials say "customers do not need to take action at this time and should be contacted directly by their bank or building society if their agreement is affected."
However, if you feel you are owed a repayment my advice is to contact your lender.

What situations does this 'entitled to clear and timely information' cover?

Alpine_Star

• annual statements under fixed-sum credit agreements
• additional information in statements for running-account credit
• notices of sums in arrears
• notices of default sums
• additional information in default notices
• notices relating to post-judgment interest.


STATEMENTS
For agreements made on or after 1 October 2008, the first statement must be given within a period of one year beginning on the day after the day the agreement is made. For pre-existing agreements, the first statement must be given within one year from 1 October 2008. Thereafter the creditor must give the debtor further statements at
intervals of not more than one year, until there are no sums which are or may become payable under the agreement.

The 2007 Regulations specify the information to be included in statements for fixed-sum credit agreements.
In particular: • the duration of the agreement and the amount of credit provided
• the rate or rates of interest applicable, together with - the period during which each rate applied
- if applicable, the element of the credit to which it applied
• the opening balance at the beginning of the period to which the statement relates
• the amount and date of any payment to the account during the period
• the amount and date of any interest or other charges falling due during the period
• the amount and date of any other movement in the account during the period
• the closing balance at the end of the period.

Prescribed wording can be found http://www.legislation.gov.uk/uksi/2...chedule/1/made
These are contained in Parts VI and VII of the Act, and in various regulations including the Consumer Credit (Information Requirements and Duration of Licences and Charges) Regulations 2007.
The OFT has published guidance on Post-contract information requirements (July 2008) (pdf 141 kb).