Banks must reimburse customers about 1 billion euros

The decision of the Financial Services Complaints Institute (Klachteninstituut Financiële Dienstverlening - Kifid) forces ABN Amro and ING to pay an additional almost 200 million euros in compensation to customers who previously paid too much interest on loans. Previously, banks expected that they would cost 340 and 180 million euros, respectively. However, Rob Goedhart from Stichting Geldbelangen believes that this is not the limit. Taken together, the banks of the Netherlands, even the amount of one billion euros may not be enough.

prehistory

Many banks charge a variable interest rate on loans, which did not always sufficiently correspond to the average market interest rate. The interest paid by the customers had to rise and fall along with the market interest rate. But in practice, the interest rate of banks fell more slowly than it should have. As a result, customers paid too much interest.

It goes about tens of thousands of customerswho have paid excessively high interest rates on loans in recent years. Now banks must return to each victim from 50 to 1750 euros. Initially, it was planned that the overpaid interest would be reimbursed from 2008, then it was decided that the compensation applies to interest paid by customers since 2001.

Lost profit

ING and the Consumer Association (Consumentenbond) have agreed to pay compensation in December 2021. Some interested customers have already received a refund amount. However, on August 10, 2022, the Appeals Committee (Commissie van Beroep) of Kifid ruled that pay additional "interest on interest" (rente-op-rente). After all, customers did not have the opportunity to use the amount they overpaid in any other way, as a result of which they missed the benefit. Now ING and ABN Amro must review all compensation amounts, including customers who have already accepted an offer from banks earlier. Customers will receive appropriate messages about this.

Unresolved issues

ING Bank is still negotiating with the Consumers Association about compensation for customers who have used expired bank products and installment payments on their credit card. ABN Amro has yet to announce exactly how flexible mortgage customers (Flexibel Hypotheek Krediet) will be compensated.

Almost a billion euros is not enough

The expert calculated that financial institutions allocated 965 million euros for compensation. He believes that the amount will be even higher in the end, because the banks Santander and Qander Primeline can also be involved in the compensation scheme. According to Goodhart, the amount of almost one billion euros is too small. Banks have adjusted for the fact that some clients will not defend their rights, receive an offer from the bank for compensation by mail, but will not respond to it.