Statutory interest is a payment which must be made under
specific legislation or a court ruling.
For APD, statutory interest falls within the scope of the
scheme, and is subject to the same terms and conditions as any
other money reimbursed under the scheme. It must be refunded to the
consumers, because it was the consumers who did not have use of the
money, not the claimant who collected it from them to pay to us.
Any statutory interest must be refunded in full; any amounts not
reimbursed must be returned to us within the specified time limit.
It may be difficult for a business to divide interest among
its customers, because some of the sums involved may have been paid
earlier than other amounts. The regulations do not specify how this
problem can be overcome. One answer may be by giving the business a
print out of the statutory interest calculation, which calculates
simple - rather than compound - interest on a period by period
basis. It would then be a relatively straightforward matter for the
business to divide interest payable into the amount overpaid for
that period. This should determine roughly what is due to consumers
for that particular period.
