T297 Questions and Answers

We are writing to let you know that we made an error on your loan account when you asked us to make a change to your loan (top-up/restructure/re-finance) or when you asked us for a new loan in the past.

A ‘Top Up’ is where a customer has an existing loan and then requests new funds for a new or similar purpose.

A ‘Restructure/Re-finance' is similar to a ‘Top Up’ but is used when a customer restructures their existing loan or changes the terms of their loan, without borrowing more money.

On your letter, there is an “Our Ref”, depending on what that reference is, the error your account was affected by is explained below.

 

When an account impacted by this error was changed (top up or restructure/re-finance), we didn’t include some of the interest owed on the old loan in the new credit agreement. This meant that the new credit agreement was incorrect. The amount we included in the credit agreement as the cost of credit for the new loan, and the repayment amounts were incorrect. Cost of credit is the total amount repayable less the amount of the loan.

As we made an error and did not include some of the interest owed on the previous loan in the new credit agreement, this amount does not have to be repaid to us.

 

When an account impacted by this error was opened /topped up, in some cases we charged a higher interest rate over the first one to three days of a loan than we should have. This resulted in a higher cost of credit over the life of the loan, which means the amount of interest charged was slightly higher than it should have been. The cost of credit outlined in the letter we sent for this loan is correct. Cost of credit is the total amount repayable less the amount of the loan.

 

If your letter states this, your account is affected by both of the errors above.

On your letter, there is an “Our Ref”, depending on what that reference is, the error your account was affected by is explained below.

 

The exclusion of some of the interest owed on the old loan in the new credit agreement, firstly resulted in lower loan repayment being applied to your account, which results in a higher cost of credit over the life of the loan. This means the amount owed is slightly higher than it should have been.

 

The initial repayment amount and cost of credit outlined in your credit agreement were correct. The charging of a higher interest rate over the first one to three days of a loan results in the total amount of interest charged over the duration of the loan being slightly higher than it should have been.

 

If your letter states this, your account is affected by both of the errors above.

To correct this, if your account is open, we have refunded the loan account with the additional amount you would have been or were charged over the remaining term of the loan due to the error. This refund cannot be withdrawn.

 

If your loan account is closed we have refunded an alternative AIB account or sent a cheque to you.

In that case, if the loan account is open we have refunded the loan account. If your loan account is closed we have refunded an alternative joint AIB account.

 

Where the loan account is closed and there is no alternative joint AIB account, we sent a cheque to everyone named on the loan. The refunded amount is divided equally among those named.

Your ICB or CCR records have not been affected by T297.

If the original interest expense did or will give rise to a tax deduction for you (for example, as a business expense), then this refund may be taxable. This will depend on your particular circumstances but is unlikely to arise if your income is PAYE based. You should consult your tax advisor for guidance.

The amount refunded includes compensatory interest only if the account was closed prior to the refund being calculated.

Yes, we have told the Central Bank of Ireland. We have kept them up to date about everything we are doing to put this right for our customers.