If you hold or have previously held a Barclaycard credit card, you could be in line for a cash payment. That’s because the card provider is refunding some of its customers who were overcharged as a result of an ‘operational issue’.
Here’s what you need to know about the situation. Plus, how you can determine whether you qualify for a refund. [top_pitch]
Barclaycard refunds: what are the details?
Existing and former Barclaycard customers, who were previously on ‘repayment plans’, may soon receive a refund from the card provider. This is all because Barclaycard has admitted it mistakenly overcharged some of its customers in the years leading up to 2018.
Barclaycard says it has already written to some affected customers.
How can you check whether you’re in line for a refund?
It’s important to note that you may only qualify for a refund if you were on a repayment plan before 2018. A ‘repayment plan’ is an agreement for credit card debt to be repaid over a set period.
These plans are typically reserved for customers who have fallen behind on repayments. That’s because, in theory, repayment plans make it easier for customers in financial difficulty to clear their balance.
However, if you are currently struggling with credit card debt, it’s often a good idea to explore a balance transfer credit card instead. That’s because repayment plans are rarely interest-free, so 0% balance transfer credit cards are often a far better option.
Why is Barclaycard refunding some customers?
The reason why Barclaycard is refunding some of its customers is that the company has revealed it incorrectly calculated default fees and interest for some customers on repayment plans.
Barclaycard is contacting existing and former customers who were impacted by its error. As a result, if you believe you may qualify for a refund, it’s worth looking out for any correspondence from Barclaycard. That’s because you could be sent a cheque through the post.
It’s also possible Barclaycard will refund existing customers directly. So, if you are an existing customer, keep an eye on your online credit card account.
If you are expecting a refund, do check that Barclaycard has your correct contact details to ensure you get your payment. To do this, you can log into your online credit card account via the Barclaycard website or mobile app. [middle_pitch]
How much will you be refunded?
Barclaycard says typical refunds are in the region of £70. However, the exact amount will depend on how much you overpaid in interest charges and fees. Your refund payment will also include any compensatory interest calculated by Barclaycard.
What if you’re not happy with the situation?
If you’re unhappy with your refund or have another complaint, you can raise this with your credit card provider.
If you don’t receive a reply, or you’re dissatisfied with the response, you can use the free Financial Ombudsman Service. For more information, visit the Financial Ombudsman Service website.
Has anything similar happened before?
Barclaycard has taken steps to refund customers on a voluntary basis. As a result, there’s no guarantee the regulator will take any further action against the company.
However, in 2019 banking giants HSBC and Santander were both caught up in controversy after it the competition watchdog, the Competition and Markets Authority (CMA), revealed that both of these banks failed to send text messages to customers notifying them how they could avoid unarranged overdraft charges.
As a result, the CMA ruled that these banks should repay millions of pounds in compensation to affected customers. The outcome was a costly exercise for HSBC in particular, with the company having to refund a cool £8 million!
Are you looking for a credit card? To discover which plastic is right for you, see our detailed guide explaining the different types of credit cards.
