Originally published November 15th, 2004.
This article on Value Ireland, Rip-Off Ireland – You Have Been Warned!, was originally inspired way back in 2004 by some online research conducted on the website. This found that 41% of Irish consumers surveyed did not check their bills before paying them.
At the time, there were a number of high profile cases where banks and other companies had overcharged customers by sometimes large amounts of money, yet customers rarely noticed. This, Value Ireland believes, is the true scale of “Rip Off Ireland”. Irish consumers are regularly having money taken from them without their knowledge – stolen in effect.
Running Total: As of January 2010 – 2,265,712 Irish Consumers overcharged a total of €646,735,500 by Irish Businesses
The aim of this article was to provide a constant reminder to Irish consumers that it is imperative that they check their bills to ensure they’re not overpaying for services received.
This constantly updated document should serve as a reminder that though you may be dealing with some of the highest profile companies in the country, these companies are not above stealing money from their customers. And worryingly, they’re not above doing it again and again.
The List Of Overcharging Shame
February 2010 – Allied Irish Bank – Allied Irish Banks is to refund more than €4 million to an estimated 40,000 account holders who were incorrectly charged. The bank said the error arose in relation to the classification of some customers’ accounts, and the average refund is expected to be €100.
January 2010 – Halifax –SOME 50,000 Halifax customers – the vast majority of the bank’s credit card customers – have been overcharged on credit card interest rates, the lender said yesterday. The average refund to customers affected will be €5. In total the bank will be reimbursing about €260,000 to customers as a result of the errors, which were identified last Septembe
December 2009 – MBNA – MBNA IS to refund about €18 million to customers after it discovered an error had been made in how interest was calculated. The company said those affected by the error would receive about €38 each. The refund is due to a drafting error in the credit card firm’s terms and conditions.
November 2009 – Pat Tracey Financial Services – Dublin-based financial services provider Pat Treacy has been fined €15,000 by the Financial Regulator. The fines were due to breaches of regulatory requirements relating to provisions of the Consumer Protection Code and the Handbook for Authorised Advisors. These regulations cover the sale of general insurance to customers.
September 2009 – Allied Irish Bank – Allied Irish Banks (AIB) is to refund almost €400,000 to over 400 tracker mortgage customers who were overcharged. In a statement this morning AIB confirmed it is refunding €395,000, which includes interest, and apologised for its error. A total of 436 mortgage accounts were overcharged. The average customer refund is €906.
April 2009 – Ticketmaster – “Ticketmaster said a “minor glitch” had arisen that led to a number of fans paying an incorrect service charge for the tie between Munster and Leinster. They were charged €5.25 instead of €4.50 on tickets for the hotly anticipated Heineken Cup semi-final at Croke Park on May 2. Ticketmaster said only a small number of fans were overcharged, as the error was noticed quickly.”
November 2008 – Hibernian Direct – This week the Hibernian Direct has had to repay 370 of their customers a total of €16.608, as well as a €45,000 fine to the Financial Regulator. This was because the Financial Regulator determined that Hibernian had broken the consumer protection code. According to the Irish Time article: “The breaches related to the sale of optional extra cover in relation to motor policies sold by Hibernian. The regulator found that Hibernian did not provide all the information required by the code when selling these extras”.
September 2008 – Health Services Executive (HSE) – THE HEALTH Service Executive faces a potential bill of €50 million as a result of a High Court ruling yesterday that it was in breach of contract over a reduction in payments made to pharmacists for dispensing drugs under various State schemes. The HSE said yesterday that it “may” have to pay back that sum which has been generated so far as a result of the reductions in payments to pharmacists.
August 2008 – Hibernian Insurance – HIBERNIAN Insurance admitted yesterday it had repaid around 350 motorists after it discovered discrepancies with their premiums. The refunds were for sums between €23 and €600 and the Financial Regulator was informed, a spokesman said.
May 2008 – Bank Of Ireland – The bank is refunding €200,000 in interest to 16,000 holders of child savings account. The bank will repay about €200,000 after paying the wrong rate of interest on the savings accounts. The incorrect interest was applied on these accounts because of an incorrect interest code applied during the period May 2003 to February 2008.
December 2007 – Quinn Direct – Quinn Direct is refunding a total of €293,000 to 13,000 customers after the company incorrectly calculated refunds due to them when they cancelled their insurance policies. Refunds are being made on 18,500 policies with an average of €15.77 plus compound interest. The refunds were incorrectly calculated on cancelled policies where there had been changes to the policies during the period of insurance. The refunds were paid between January 2001 and February 2006. Quinn Direct discovered the error during an internal review.
November 2007 – Ulster Bank – For the second time in four months, Ulster Bank has admitted that it stole money from it’s customers. This time it was students it picked on, admitting that it took upwards on €950,000 from 26,000 of them – an average of €88 per student. The bank said an internal review discovered that it had applied the charges on the registered student accounts, which are not supposed to have any interest or charges imposed on them.
October 2007 – Allied Irish Bank has refunded €266,000 to 3,773 customers and apologises for stealing money from them. The reason this time was that over the past 10 years they took Stamp Duty from customers who had AIB credit cards, but were living abroad. Though, in this situation, AIB probably didn’t benefit from this “mistake” since they would have been supposed to pass this money on to the Revenue Commissioners.
September 2007 – ESB – According to the Sunday Independent today (here) the ESB have been possibly overcharging up to 50,000 of their customers. The ESB has refused so far to refund these customers, many of whom may have been overcharged through the estimated billing process. According to the paper – “The overcharge arises when the customer pays the bill that reflects the exact number of units used. The ESB charges any customer whose bill runs over a tariff hike date for all the excess units at the latest, higher unit rate, rather than at the rate at the time when the electricity was used.” Update 28th October: It’s estimated that 100,000 customers will have been affected by this overcharging. Confirmed: ESB has had to repay €3.5m to 170,000 customers.
August 2007 – Ulster Bank has admitted that it thieved €4m from 25,000 of it’s clients by overcharging them when it didn’t not refund borrowers who were owed money on insurance policies after they had repaid loans early. This “oversight” was discovered following an “internal review”. The bank said the average refund was €170. Ulster Bank said it had kept the Financial Regulator fully informed. In a surprising move, the Financial Regulator has said and done nothing.
May 2007 – Eircom – Today, Eircom have confirmed that 0.5m calls to free phone numbers and competition lines from land lines were incorrectly charged on the bills over over 100,000 customers between April 24th to May 17th this year. Calls were charged to customers even though no connection made. Apparently, it was a computer error that caused this problem. Eircom say that they’ll be refunding customer immediately.
May 2007 – Irish Nationwide – At their AGM, the Irish Nationwide confirmed that the costs to the group for overcharging customers totalled €3m in settlements following several rulings against the group by the Financial Services Regulator.
May 2007 – First Active – First Active will alert thousands of customers they are due a refund due to an overcharging error which actually occurred 3 years ago. The refund will be paid to consumers who bought mortgage protection. The average repayment is €40, but First Active have acknowledged that some customers will receive refunds amounting to hundreds of euros. First Active, which blamed a computer error, said that the affected customers will be refunded the amount they were overcharged, plus interest.
August 2005 – AIB – AIB has launched high-level investigations into new allegations that the bank altered foreign exchange (FX) rates to boost profits over a period of more than 15 years. The investigations, which are being conducted in conjunction with the Financial Regulator, are separate from last year’s inquiry into the €34 million overcharging of customers on FX fees. The new inquiry relates to claims that AIB branches deliberately changed FX rates on a daily basis during the 1980s and 1990s at customers’ expense.
June 2005 – Jamster – A German company selling mobile phone ringtones has been accused of overcharging some Irish customers. Reports this morning said the Office of the Director of Consumer Affairs signed up to an offer from Jamster to receive six ringtones and six logos for €4 per week. The move followed complaints that the company was overcharging customers, sending texts in the middle of the night and not ceasing subscriptions when instructed to do so.
April 2005 – AXA Insurance – Insurance company AXA is to refund €1.7m to customers who overpaid for home or motor policies. A spokesman for the company said the number of customers affected is 130,000 and the average repayment is €10. Last December AXA wrote to the financial regulator, IFSRA, about its policies for charging for insurance. It informed the regulator that it had not been issuing cheques to customers who had overpaid by amounts of less than €25.
April 2005 – Bank of Ireland – Bank of Ireland has admitted not refunding customers who had overpaid on insurance products used to cover borrowings like car loans. It is estimated about 65,000 loans were affected by the errors. Bank of Ireland said all the customers who were overcharged would be refunded. It is understood the total amount of repayments will total €15m, including interest.
March 2005 – AIB – AIB has written to about 4,200 customers telling them they were overcharged on their home loans for up to 12 years. The overcharging came to light as part of the bank’s lengthy trawl of customer accounts after last year’s foreign exchange overcharging scandal that will cost AIB €50m. AIB said the repayments would amount to €3.6m, although it has yet to tell individual customers how much they will get. The Surplus Builder product is no longer offered to customers.
January 2005 – VHI – The Voluntary Health Insurance company is to refund nearly 11, 500 patients because of underpayments for care cover. The total sum involved is €423,000 and covers the period 1996 to 2004. It was discovered that the VHI had failed to pay the minimum State benefit for care for Plans A and B. Nearly 11,500 patients are to be repaid on average €37 each, which includes interest – a small number will receive up to €1,600.
January 2005 – Irish Life – Irish Life has written to around 25,000 customers to inform them that it had mistakenly deducted Government stamp duty from their life assurance policies between 2001-2004 and that their policies will be reimbursed. The life and pensions company said yesterday it understood a total of around €400,000 was deducted in error from the policies, which would have included certain pension and savings products containing life cover.
December 2004 – permanent TSB – The bank Permanent TSB is to repay more than €600,000 to mortgage customers it has overcharged over the past three years. The bank will be sending letters to 1,500 customers in the coming weeks with refund cheques averaging €400. The problem arose because the bank had applied the wrong interest rate on their mortgages. The bank identified the problem last summer and informed the Irish Financial Regulatory Authority.
December 2004 – Eircom – Eircom has apologised to thousands of customers who could be left with financial problems due to a billing error. The company said that due to a processing error in the direct debiting of the August/September bill, approximately 16,000 customers did not have their bills debited from their bank accounts. This amount was included in the October/November bill. The full amount would normally be debited from bank accounts within 21 days of receipt of the bill, but eircom have promised to refund ‘arrears’. “When this error was highlighted, the billing process for October/November was already in place and unfortunately it was not possible to notify approximately 11,000 of those customers,” eircom said in a statement.
December 2004 – O2 – Thousands of O2 Ireland customers are being refunded for roaming fees they were charged while travelling in Northern Ireland over the past six months. However, the firm denied yesterday that it had overcharged customers, and does not plan to refund people who were charged the roaming fees before April. O2 Ireland is refunding subscribers who signed up for its All Ireland tariff, which is meant to enable its customers to make calls without incurring roaming fees while in Northern Ireland.
However, the special tariff, which was introduced in September 2003 and costs €5 per month, does not work for any calls to numbers in Northern Ireland when the international prefix 0044 is used.
December 2004 – Irish Government – The Government admits that it knew a year ago that pensioners were being charged illegally in nursing homes, it was claimed today. Medical cards were given to all people over 70 years of age in 2001 but it emerged last month that nursing homes continued to deduct charges from patients’ pensions. The Government confirmed yesterday that all full-time patients of public nursing homes, mental hospitals and residential units for people with disabilities will be entitled to a once-off ex gratia payment of up to €2,000 after the system used to take their contributions was found to be illegal. This repayment of overcharging is expected to cost the Government in excess of €50m.
- Updated January 2008 – The total bill for the nursing home repayment scheme will be less than €500 million, after just half of those entitled to compensation came forward before the closing date for the scheme. At the time of its launch, the government estimated that 70,000 people were entitled to payments. However, just 35,000 people lodged claims in relation to the scheme, according to government sources. The bill for the scheme was initially expected to be more than €1 billion, but this has been revised downwards, the sources said. The closing date for the scheme was last Monday, and only applications lodged before that date will be entitled to compensation.
November 2004 – ESB – The ESB confirmed that around 3,000 of its domestic customers have been overcharged by the company over the past six years. The company admitted that around one in every 500 of its 1.5 million domestic users across the country have been overcharged an average of €200 since 1998.
October 2004 – Eircom – Promised to refund any customers who have been charged for directory entries by the company since it sold its directories business more than two years ago.
August 2004 – Eircom – Admits overcharges 31,500 customers an estimated €409,000 though billing errors associated with its call management services.
July 2004 – ESAT BT – It came to light that approximately 1,900 ex-Esat BT customers were inadvertently sent a bill for €30 for a service they no longer receive. These bills were sent in error, following the incorrect inclusion of an old customer database in a recent billing cycle. Esat BT wrote to everyone who mistakenly received such a bill to inform him or her of this error. The letter confirms that no charges have been applied and no direct debits have been presented for payment.
July 2004 – O2 – In its second admission, O2 confirms it overcharged a total of 136,535 subscribers were overcharged since February 2004. This involved a repayment of €721,892.
July 2004 – Bank of Ireland – Refunded €1.8 million in fees to credit card customers as a result of a High Court decision handed down in favour of Director of Consumer Affairs Carmel Foley last in 2003 which related to fees that include monthly subscriptions, transaction charges, as well as late payment charges and over-limit fees.
July 2004 – AIB – Once again AIB apologises to its customers and confirmed its commitment to fair and honest dealings at all times. This is as a result of revelations of overcharging of approximately 170,000 accounts of upwards on €25m for foreign exchange transactions.
July 2004 – AIB – The bank is ordered to pay damages of almost €20,000 plus costs after overcharging a retailer on his current account after being over-charged by more than €9,000 over a two year period.
July 2004 – AIB – The bank confirmed to RTE News that it was to make refunds to 34,000 of its third level and graduate customers. The total amount involved, before interest compensation, is around €1.4m.
July 2004 – NTL – The cable company admitted over-charging its Irish customers by an estimated €30,000. The customers were reportedly billed for dial-up internet access at a cost of €15 per month even though they had upgraded to broadband.
May 2004 – AIB – The bank confirms that more than 500 mortgage customers may be due refunds because of incorrectly applying payment protection on top-up mortgages.
May 2004 – Bank of Ireland – The bank repaid to €3.4m to beneficiaries of trust funds overcharged fees due to an error dating back to 1971. It was then also estimated that a further €2m was still to be repaid.
May 2004 – Bank of Ireland – The bank admits they have to refund €390,000 to second-level students who were incorrectly charged government stamp duty.
June 2004 – Permanent TSB – The bank confirms overcharged business customers in 1997 and is in the process of paying them back and giving them compensation. This would cost it about €100,000.
June 2004 – Permanent TSB – The bank admitted it had over overcharged customers on cheque retrieval transactions to the tune of about €33,000.
Oh, and for the record, the occurrences of undercharging were as follows:-
April 2008 – Ulster Bank and First Active – AT LEAST 13,000 Ulster Bank and First Active customers have been told their banks under-deducted Deposit Interest Retention Tax (Dirt) on their savings accounts. The two banks have written to affected customers in the past week about the miscalculation of Dirt. A spokeswoman for Ulster Bank said letters had been sent to 6,500 customers of its subsidiary, First Active. The bank says the miscalculation occurred as a result of a systems error and the average amounts involved for each customer are small – just €1 in the case of First Active.
February 2009 – PermanentTSB – According to the Irish Times, “PERMANENT TSB mistakenly allowed customers to switch from expensive fixed-rate mortgages to cheaper variable rates without charging a large breakage penalty.” Banks typically charge customers a penalty of between three and six months’ interest to do this, and breakage fees of €10,000 or more would not be unusual. However, due to an administrative error, Permanent TSB only charged customers a “token amount” for breaking fixed rates and customers who only paid a nominal breakage fee before the mistake was discovered will not be charged any extra”.
November 2008 – Hibernian Life – Has written some of its pension clients informing them that it had mistakenly under-charged them on their investments. It is understood that a number of people who took out pension policies had charges set at 0.75pc when the product literature stated that the annual management charge should be 1pc. But the life company will not be imposing retrospective charges on people who were not charged the proper fund management charge, the Irish Independent has learned.
April 2005 – AXA Insurance – As part of revelations in April 2005 regarding neglecting to refund customers who had overpaid on policies, Axa revealed that it had also not followed up on customers who had paid less than they should have. The company decided to write off the discrepancies rather than issue and post cheques to those who overpaid.
January 2005 – ESB – The ESB says that it will not pursue the approximately 1,000 rural customers who were undercharged for years for their electricity service. All 1.6 million electricity customers pay what is known as a “standing charge”, which is similar to the line rental charge in the telecoms industry. However, for several years, the 1,000 customers have been paying the cheaper urban form of this charge, rather than the rural version. The cost to the ESB is understood to be minor. From next month the customers will switch from the urban standing charge (€9.14) to the rural standing charge (€15.40), a difference of €6.26.
August 2004 – ESB – The ESB begins to pursue around 12,500 customers who owe €120, on average, money that will be collected over the next three years.
May 2004 – National Irish Bank – The bank is forced to recover cash from 5,000 credit card customers after a mix-up that led to the bank undercharging consumers on currency translations. All cash was retrieved by the bank within a swift 10 days of the error being noticed.
July 2004 – AIB – The bank uncovered cases where former students and graduates received discounts for longer periods and for larger amounts than advertised, but the bank says it will not seek to recover the €400,000 involved in these cases.
Given all of this startling evidence of overcharging by large well known Irish companies, widely reported in the media, it is confounding that upwards of 42% of the surveyed visitors to www.valueireland.com admit that they don’t check every bill they must pay.
Why then, when we have these companies themselves telling us that they are overcharging their customers, do we as consumers not check every bill that we get through the door to ensure that we are only being charged for the services we have received?
If we don’t take such a precaution as checking a bill to protect ourselves from overcharging businesses in Rip-Off Ireland, how can we expect others to protect us from these businesses?
Granted, this precaution may need a little effort. We will need to understand how are bills are laid out and broken down. We may need to take out the calculator. We may even need to make a phone call or two to request clarification or extra information from these businesses. But it’s our money – shouldn’t we make sure we only hand it over when we’re sure everything is above board?
Given that we know these companies have overcharged their customers in the past, we should therefore know what to possibly expect in the future. Can we then really expect any sympathy in that future if we ourselves are overcharged? We have been warned!!!
Overcharging In Ireland (Summary)
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Overcharging In Ireland (Bookmarks)
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