To ask for help on what this Ombudsman decision means

[SwanLake66]

Long story short I took the bank through the Ombudsman after they failed to allow me a charge back on my credit card due to a holiday I couldn't go on during covid. It's taken 18 months but I've finally got a decision. They agree with me and have ordered the bank to refund the amount I paid and recalculate the interest I would have got if my claim had been successful 18 months ago. Also pay 8% interest on any days my account was in credit then.
It's the interest that confuses me. Not sure what interest I should have had on the first point as the card is never in debt I pay it off every month. 8% of what? The amount they should have paid me back for the holiday?
If anyone could fill me in I would really appreciate it!

You're best off asking the FOS to clarify, but it's usually a percentage interest payment to compensate you for not having had that money in your own bank account where it could have been accruing interest. (Obviously nowhere pays you 8% interest, that's just an oddity - the interest level awardee has always been higher than you can get in any bank account)

You'll get some interest on top basically. Just be glad you're getting your money back thats the main thing.

It's not worded very well - but for complaints found in your favour, the FOS will always instruct the bank to put you back in the same position you'd be in had the error not occurred.

In your case, the error was the bank not refunding you 18 months ago. So the bank will now need to pay you compensation to put you in the same position as if that £x had been sitting in your account for 18 months.

If you credit card has been in debit and had interest charged, they will need to refund it based on the balance being lower by the refund amount.

If you pay the card off in full, you could hypothetically have had the refund amount sitting in your account for 18 months - so they'll pay you 8% compensatory interest on the refund amount, from the date it should have been paid.

If you Google '8% compensatory interest calculator' there are some online calculators that will work it out for you, assuming you have the amount and date 18 months ago (ish) you should have received it.

Oh I'm very glad it's such a relief! Won't go into it now but they treated me awfully and lied etc. I cried when I got the ruling!! Just don't understand how much extra roughly with the interest.

Thanks all.
Fruit it says 8% interest on each day my account was in credit.
How would they work that out? Seems confusing!

Basically the bank goes through your statements for the past 18 months and work out what it would have been each day had the charge back been applied. It must refund you the difference in interest between what you paid and what you would have paid if the charge back had happened. For any periods that deducting the amount of the charge back would mean you overpaid your credit card balance, it would have to pay you a rate of 8% interest on the overpayment.

Ah OK I think I'm getting it more now. I wonder if they will itemise it all or am I supposed to trust them? In 18 months there is a hell of alot of transactions and payments to clear them but I have never been in debt on that account apart from odd time I've miscalculated paying it off early to the tune of 2p or similar!

If, for example, the amount of the refund is £1500, then you are owed interest for all the days your card balance was less than £1500, and the interest is due on 1500-balance at the daily rate equivalent to 8% annual. For any period your card balance was £1500 or greater then there is no interest due. It is quite a task to calculate it, and I would be tempted to leave it to the bank as I would think they wouldn't dare make further errors after the ombudsman's involvement.

What you should do is communicate to the bank that you would expect and appreciate a further amount as a gesture of goodwill (due to the length of time it has taken, your anxiety through the process etc etc). I would think that £50 is the lowest they should offer, perhaps £100 if the refund is over £2500.

What you should do is communicate to the bank that you would expect and appreciate a further amount as a gesture of goodwill (due to the length of time it has taken, your anxiety through the process etc etc). I would think that £50 is the lowest they should offer, perhaps £100 if the refund is over £2500

The bank won't give any more.

The op has escalated her complaint to the FOS - if the ombudsman had felt any additional distress/inconvenience award was due, they would have said so in their final decision. It doesn't look like they do as the op mentioned only the 8%.

The bank will now pay what the FOS have awarded, they won't enter into any further negotiations with the op.