The total of just over £47 million comprises refunds
secured since the CMA started enforcing the Order in
2018, including new refund amounts from Royal Bank of
Scotland (RBS) and Santander.
RBS failed to send accurate text warnings to 36,000
customers, from February 2018 until December 2019, and
has now agreed to fully repay the charges – as well as
providing an additional 8% in interest – bringing the
total it will refund to customers to £2.2 million.
The CMA’s letter to
RBS was published today.
Santander has put aside £17 million to refund customers
for 6 breaches of the
Order, announced by the CMA last year. This will
impact up to 470,000 customers who will all be refunded
in full. This is on top of £2m in refunds by Santander
already announced by the CMA in May 2019.
Since 2018, the CMA’s action has also led to refunds for
customers from 3 other banks and building societies of
around:
- £11 million for current account holders at Metro Bank
- £8 million for current account holders at HSBC
- £7 million for current account holders at Nationwide
The CMA dealt with some of the worst breaches by issuing
legally binding directions, which ensured that banks were
committed to refunding those affected. In some cases, the
banks and building societies also voluntarily offered to
pay interest on the charges.
In December 2019, the Financial Conduct Authority
introduced reforms to its own overdraft rules, expanding
the requirement to send alerts to all overdraft charges.
This meant it was no longer necessary for the CMA to
retain Part 6 of the Order - the responsibility for this
now sits with the FCA.
Andrea Coscelli, Chief Executive of the CMA, said:
Text alerts have been absolutely key in helping people
to avoid unfair unarranged overdraft charges and, where
banks have failed to comply, the CMA has worked to
secure millions in refunds for customers.
While these breaches are disappointing - and may have
been preventable had the CMA been able to issue serious
financial penalties - our action has put a total of
more than £47 million back into people’s pockets. With
responsibility for enforcing this now sitting with the
FCA, the dedicated sector regulator, we’re confident
that this will continue.
Notes to editors
- Part 6 of the Retail Banking
Market Investigation Order 2017 came into
force in 2018, after the CMA’s retail banking market
investigation identified a number of competition
problems in both the personal current account (PCA) and
small and medium-sized enterprise (SME) banking
markets. The Order is part of a package of remedies
designed to address these problems.
- The CMA has today published a letter to
RBS about breaches of Part 6 of the Order.
- The law prevents the CMA from imposing fines for
breaches of either Orders or undertakings. This limits
the CMA’s ability to ensure these breaches do not recur.
However, , Chair of the
CMA, requested these powers to ensure proper deterrence
as part of a package of wider reforms to the CMA’s
powers in a letter to the then Secretary of State for
Business, Energy and Industrial Strategy.
