AIB To Refund Customers Overcharged In Forex Transactions

by Jason Gorringe, for LawAndTax-News.com, London

26 July 2004

Following a board meeting on Thursday, Allied Irish Banks (AIB) announced that where customers were charged rates on foreign exchange transactions which had not been cleared by the Irish Financial Services Regulatory Authority, the bank will repay them, despite the fact that there is no legal obligation for it to do so.

According to reports, AIB initially estimated the amount overcharged to be in the region of EUR14 million, but lodged EUR25 million with the Central Bank as compensation for those affected by the error. However, it now estimates that the cost of inquiries could be as much as EUR50 million.

Explaining the reasoning behind the decision to offer refunds to affected customers, AIB Group chief executive, Michael Buckley announced last week that:

"While the bank failed to notify the Regulator, as required by law, in relation to certain charges, our customers were not overcharged in their foreign exchange dealings with the bank. However, our bond of trust with our customers means we are making full payment because they are entitled to the assurance that what they pay is not only market competitive, but complies with regulatory requirements."

He went on to add that: "Where our own investigation found instances where we made other errors and customers were overcharged we are making full restitution."

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