Bank Overcharging and the Leap Year

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Bank overcharging and the Leap Year
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• Bank of Scotland has been forced to compensate
  thousands of customers for incorrectly charging
  an extra days mortgage interest for the 2008
  Leap Year.
• According to the bank, the 10-year-old
  overcharging error only came to light during a
  recent review of its Irish mortgage accounts
  conducted prior to its sale in September of Irish
  retail mortgage loans to Australian-owned loan
  portfolio and property manager, Pepper Asset
  Servicing.
• The bank has set up a helpline for the estimated
  28,000 affected customers.

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• While the bank itself refused to quantify the
  exact number saying a guess on numbers is likely
  to be inaccurate, the Irish Examiner was told by
  staff operating the helpline that the figure is
  understood to be in the region of 28,000.
• The bank also refused to say how much
  compensation is involved, but again helpline
  staff said they understand the bulk of the
  redress figures are double digit. This could
  put the total payout at up to 2.8m.
• Asked if the bank has informed the Central Bank
  of the error, a spokesperson for Bank of Scotland
  said We are in contact with the regulator about
  this.

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• The spokesperson also said that the additional
  days interest was charged for the February 29,
  2008, leap year which has not occurred in any
  other leap year.
• We are currently reviewing relevant accounts and
  will ensure that no customers are out of pocket
  as a result, she said.
• The letter sent to customers contains an apology
  from the bank and a cheque to cover financial
  loss. This includes the incorrectly charged days
  interest plus compensatory interest at 8 per
  year, calculated from June 2008 to December 2018,
  plus an additional 1 to ensure you are not out
  of pocket for any fees your bank may charge for
  encashing your refund.

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• Joint mortgage account holders should each
  receive 50 of the amount due.
• This paper asked the Central Bank if it is aware
  of the overcharging error and of the number of
  people affected by it and the amount of
  compensation involved.
• The Central Bank said while it cannot comment on
  individual firms it is aware of the error and
  has engaged with the firm in question.

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• In a statement, the Central Bank said it expects
  all firms to have adequate systems and controls
  in place and where issues that affect customers
  arise, they should be addressed and rectified,
  with the overarching objective of protecting
  consumers interests, including ensuring that
  they are not left out of pocket.
• Firms must also communicate clearly and promptly
  with affected customers and ensure that any
  identifiable loss is remediated. Any customer who
  considers that they have been affected by this
  error should contact Bank of Scotland via
  Pepper.

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