Warning: Don't bin post from Barclaycard - the credit card firm is sending cheques of up to £300 to customers on repayment plans
Don't bin post from Barclaycard as it's sending cheques worth up to £300 to both former and existing credit card customers, MoneySavingExpert.com can reveal. It's refunding wrongly charged interest and fees from before 2019 by cheque or transfer to customers on repayment plans. The credit card company tells us the average payout's around £70 but we've seen one MoneySaver get £300 back.
Details are scarce but below is everything we know about the payments.
The average refund is £70, but you could get more
How much redress is due will depend on the impact the issues had on the customer, according to Barclaycard, but it says the average payout is roughly £70.
The refund will be made up of the incorrect interest and/or fees that were applied during the relevant period, plus compensatory interest where applicable, and a deduction for income tax (as required by HMRC).
But one MoneySavingExpert.com reader told us they have received a cheque for £300 from Barclaycard related to the issues - though this won't be the case for everyone. They wrote to us on Facebook saying:
If you've been given a refund of interest and charges out of the blue by Barclaycard that relate to being on a repayment plan, let us know by emailing firstname.lastname@example.org.
You will be sent a cheque in the post or receive a transfer
How you receive your refund is dependant on your balance and whether you are still a Barclaycard customer.
- If you hold a Barclaycard with a zero balance, or no longer hold a Barclaycard, you’re more likely to receive a cheque in the post or an electronic payment transfer.
- If you hold a Barclaycard with a balance on the card, then you're more likely to receive a direct refund on the account to reduce the card balance.
Check Barclaycard has your latest contact info
Affected users will be written to in “due course” by post or email and Barclaycard stresses that you do not need to contact the lender first.
However, you should make sure that the email and home address Barclaycard has on file for you are up to date in case it needs to contact you. You can ensure this by logging into your online banking via the app or the website then selecting 'your contact details', or by phoning customer service on 0800 151 0900.
If you think you're affected you can also contact the lender to check by calling the same number above. Alternatively, you can join an online chat through the Barclaycard app.
The issue impacts those on repayment plans before 2019
After a recent review, Barclaycard found that, because of an operational issue, customers who took out a repayment plan in the "few years" leading up to - and including - 2018 were overcharged.
The lender admitted that these customers on repayment plans, who had fallen behind with repayments, had been charged default fees and interest incorrectly. The company said it had not provided the service it should have and is therefore contacting those affected to explain and provide a refund.
Barclaycard wouldn't tell us anything further, only saying that it "apologises unreservedly to those customers" and that it "has taken, and continues to take, significant steps" to review and improve its "systems, processes and training".
Regulator the Financial Conduct Authority wouldn't comment when we asked if it was aware of this initiative.
The move follows the launch of what appears to be a similar redress scheme by HSBC last year, which saw it refund interest and charges, plus provide compensation, to customers who were in arrears between 2010 and 2019 and who the bank identified as not receiving good customer service from its financial distress teams.
Both former and current customers may be affected
While it is unclear exactly how many customers have been impacted, Barclaycard said that those who are owed money will be written to in "due course" and refunded. Both current customers AND past customers who took out a repayment plan in the period mentioned above will be eligible for compensation.