Top-Up Loans Accrued Interest Refund
20 April, 2023During the current financial year, a potential issue was identified by Monaghan Credit Union Ltd in the calculation of the “Total Interest Payable” figure on a number of credit agreements for top-up loans issued between 2012 and 2015, where there was an accrued interest amount outstanding at the date of the top-up.
Specifically, the credit agreement generated by the IT system noted the amount of interest due on the loan being topped up, including accrued interest and the total interest payable on the loan. However, the amount of accrued interest outstanding on the loan being topped up was not included in the total amount of interest payable, as stated on the credit agreement. As a result, where interest is accrued at the point of top-up, the accrued interest due figure is not accurately reflected on the credit agreement, which could cause uncertainty and confusion for members regarding the correct amount of interest payable on the loan.
Following a full review of all top-up loans issued by Monaghan Credit Union Ltd during the reference period, it was determined that no overcharging or over collection occurred. However, the Credit Union acknowledges that the credit agreement ‘Total Interest Payable’ figure did not include ‘accrued interest’ and this could have been misleading for members. In light of this omission, and as a gesture of goodwill, the Credit Union is going to refund accrued interest to all affected members.
Should you have any questions in respect of the refund, please contact us, and we shall be happy to assist you.
