Seventeen UK banks and building societies have agreed to repay a total of ?149m ($245.8m) in interest and charges to almost half a million credit cardholders.
An investigation of the Office of Fair Trading (OFT), a UK regulator, found 17 lenders guilty of providing terms and conditions which don’t comply with the Consumer Credit Act (CCA).
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The lenders – unnamed – did not provide customers with some of the ‘post-contractual’ information about their credit agreements. According to the OFT, many failed to stipulate the wording required by law in statements and arrears notices.
Under the Act, a lender is not entitled to recover interest or default charges for any period during which if failed to comply with certain aspects of the law.
David Fisher, OFT senior director for consumer credit, said: "These issues were not deliberate misconduct, but the institutions concerned should have ensured they were complying with the law."
About 497,000 credit and store card holders should receive compensation averaging ?300.
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By GlobalDataThe 17 lenders involved pledged to contact customers directly to let them know about any charges that will be refunded.
"The OFT welcomes the proactive steps taken to return money to customers where it was incorrectly charged," said Fisher.
The refunds follow similar moves by Barclays, which repaid ?100m to customers last year, and Northern Rock, which refunded ?270m.
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