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Barclays to refund at least 300,000 borrowers | Barclays to refund at least 300,000 borrowers |
(35 minutes later) | |
Barclays Bank is to refund at least 300,000 personal loan customers because it made mistakes on their paperwork. | Barclays Bank is to refund at least 300,000 personal loan customers because it made mistakes on their paperwork. |
If mistakes are made in loan paperwork, all interest paid must be returned. | |
The errors, which are expected to cost Barclays about £100m, date back to October 2008. The bank said it would begin to contact the affected customers in the next month. | |
It is investigating whether similar mistakes had been made in other parts of the business such as Barclaycard. | |
The errors on statements and arrears notices were mentioned with the bank's annual results in February, when it reported that income from retail and business banking had "declined 4% to £1,086m primarily due to provisions taken to remedy historical interest charges incorrectly applied to customers". | The errors on statements and arrears notices were mentioned with the bank's annual results in February, when it reported that income from retail and business banking had "declined 4% to £1,086m primarily due to provisions taken to remedy historical interest charges incorrectly applied to customers". |
More details were given on Monday in a prospectus that the bank put out as part of its attempts to raise £5.8bn in new capital from investors. | More details were given on Monday in a prospectus that the bank put out as part of its attempts to raise £5.8bn in new capital from investors. |
'Secret payments' | 'Secret payments' |
In a statement, Barclays said: "whilst no-one has been mis-sold to, customers are entitled to have their interest payments returned". | In a statement, Barclays said: "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." | "No customer will pay more than they were ever contractually expected to." |
The error is similar to one made by Northern Rock Asset Management, which announced last year that it would be returning interest paid by 152,000 borrowers as a result of mistakes in paperwork. | |
Also in Monday's prospectus was news that Barclays is facing a £50m fine from the Financial Conduct Authority (FCA) for its 2008 investment deal with Qatari investors. | Also in Monday's prospectus was news that Barclays is facing a £50m fine from the Financial Conduct Authority (FCA) for its 2008 investment deal with Qatari investors. |
The FCA accused the bank of agreeing £322m in secret payments to investors to gain their support for a previous share issuance, worth just over £5bn, taken up in 2008 by Qatar Holding, part of the state-owned investment authority of Qatar. | The FCA accused the bank of agreeing £322m in secret payments to investors to gain their support for a previous share issuance, worth just over £5bn, taken up in 2008 by Qatar Holding, part of the state-owned investment authority of Qatar. |
The problems are the latest in a catalogue of problems for the bank including: | The problems are the latest in a catalogue of problems for the bank including: |