HSBC has agreed to pay compensation to 18,500 John Lewis and HFC Bank customers who were unfairly charged for debt collection.
Customers who fell into arrears on credit and store cards with the lenders were passed on to the firm’s solicitors who added a 16.4 per cent to outstanding balances as a “debt collection charged”.
In 2010 the Office of Fair Trading ruled that these charges were unreasonable and ordered the firms to stop charging them.
The redress scheme affects customers of HFC and John Lewis Financial Services Limited (JLFS) who fell into debt between 2003 and 2009.
Both banks are now owned by HSBC, who agreed to pay back £4million in compensation to 6,7000 people in 2017.
But following an investigation by the Financial Conduct Authority (FCA), it has promised to extend it redress scheme to thousands more.
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The bank is sending out letters to customers who it believes may be owed cash.
How much you may be owed depends on individual cases but it previously said that it will pay eight per cent interest a year on top of refunds.
HSBC is also contacting customers where records show that they’ve repayed the debt but it’s not clear whether the fee was added.
Those who can prove they were charged will also be refunded.
People who haven’t received a letter but think they may have been affected are being urged to contact HSBC directly by post HSBC UK Bank Plc, Business Review Centre, Redcliff Quay, 120 Redcliff Street, Bristol, BS1 6HU, or by phone on 03455 857 564.
The FCA said that the bank had voluntarily agreed to extend the redress scheme.
HSBC UK spokesperson said: “Doing the right thing by HFC customers who paid unreasonable debt collection charges during the period 2003-2009 is an important undertaking for us.
“Earlier this year we expanded our review to identify further HFC customers who may be eligible for reimbursement through a broader and more complex investigation of third party records.”
Last month, HSBC rolled out an update on its ATM machines that make it harder for fraudsters to steal your cash.
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