Both HSBC and Santander have agreed, following Competition and Market Authority (CMA) action, to refund customers after they both broke a legal order.
Santander was found to have broken Part 6 of the CMA’s Retail Banking Market Investigation Order six times whilst HSBC broke the rule twice.
Both banks have agreed to refund customers following the action. HSBC has confirmed it is refunding £8m to 115,000 customers whilst Santander has agreed to issue a refund but has yet to confirm the number of customers affected and how much it will refund.
Part 6 of the Retail Banking Market Investigation Order ensures customers receive text message alerts before banks charge them for going into an unarranged overdraft. This gives customers time to take action to avoid any charges. Both banks failed to send alerts in all of the circumstances required by the CMA.
The breaches first occurred in February 2018, when Part 6 of the Order came into force.
The refunds paid by the banks will cover all fees incurred by customers from going into unarranged overdrafts where they had not been warned beforehand by the required text alerts.
The CMA is also directing Santander and HSBC to undertake an independent review of their compliance with Part 6 between February 2018 and December 2019.