A leading credit card company is to refund 18 million euro to customers after overcharging interest.

MBNA said errors in its terms and conditions meant interest had wrongly been applied to hundreds of thousands of accounts.

A painstaking investigation is now under way as the country's third largest credit card provider works out who it needs to reimburse.

"The time period, the number of customers and number of transactions involved make this review a very complex and lengthy process," said an MBNA Europe spokeswoman.

"However, we will ensure that if a customer is due a refund, plus related interest, they will receive this by March 2010 at the latest. The refund to the majority of customers is likely to be around 38 euro or less."

The company wrongly went ahead with charges despite a drafting error within the company's 2007 terms and conditions which prevented interest being applied in certain circumstances. After the problem was identified MBNA conducted a full review of its terms and conditions stretching back to 1997.

"We discovered an additional error and therefore we will refund any interest which may have been applied on the annual Government Tax charged on accounts up to 2007 on the basis that we didn't set out how interest would be applied," said the spokewoman.

"We sincerely apologise for any inconvenience and assure customers that it is our intention to resolve this matter fairly, correctly and in a timely manner."

The company has sent letters to its customers and the costly error has also been reported to the Financial Regulator.

The regulator said its consumer protection code was being followed closely by MBNA to make sure customers were fairly and quickly reimbursed. A spokesman said: "The Financial Regulator is satisfied with how this matter is now being dealt with and it is engaging with the firm to ensure that procedures and remedial action is undertaken to prevent this type of issue reoccurring."