Under the Retail Banking Market
Investigation Order 2017 – put in place by the Competition
and Markets Authority (CMA) after it found competition concerns
in the retail banking market – banks and building societies are
required to follow strict rules when it comes to informing
customers about their products and services. This includes
showing correct interest rates for loans and accurately
displaying the right locations for bank branches and ATMs.
The Order also put in place ‘Open Banking', an initiative which
set high standards for transparent and secure data sharing for
retail banking services in the UK. It enables a wide range of
data on products and services to be used by third parties to
create innovative apps and to improve services such as comparison
sites, which make choosing a bank easier.
HSBC, Lloyds, TSB and AIB all failed to make available correct
data on their products or services and have breached the Order in
the following ways:
Compliance with the Order is closely monitored by the CMA and
banks are obliged to report all incidences of non-compliance
within 14 days.
Lloyds, TSB and AIB have confirmed they are making changes to
their operations to prevent further breaches – ranging from
enhancing their internal procedures, to improving oversight by
senior managers, updating internal checklists and retraining
staff.
In the case of HSBC - which the CMA considers has breached the
Order more extensively in this instance - added measures are
needed to prevent future breaches. To start the process, the CMA
has issued HSBC with detailed directions which include an action
plan to ensure full compliance in future.
Dan Turnbull, Senior Director at the CMA, commented:
People deserve banks they can trust to serve them well. Having
correct information is essential when making important decisions
about our finances. Banks handling our hard-earned money should
have adequate processes in place to ensure this happens.
It's disappointing that 7 years on, we have to put in place
formal enforcement measures to secure better compliance from a
major bank like HSBC which, yet again, is in breach of the rules.
The CMA will continue to closely monitor all banks' compliance to
ensure customers can clearly and confidently manage their
finances.
Notes to editors
- The Directions for HSBC
and the letters to HSBC, Lloyds, TSB and AIBhave been
published online, which include details of the breaches and the
actions the banks have taken.
- The CMA's market investigation into the retail banking market
(Retail Banking Market
Investigation) found separate adverse effects on
competition (AECs) in the retail banking markets in both Great
Britain and Northern Ireland. The CMA put in place
the Retail
Banking Market Investigation Order 2017 to address its
concerns.
- The Open Banking remedy in Part 2 of the Order requires the 9
largest banks and building societies in Great Britain and
Northern Ireland to have open and common banking standards for
securely sharing transaction data and to grant free access to
this data to Third Party Providers. These providers, using this
data, can compete to provide innovative, secure services to
consumers.
- Since the Retail Banking Market Investigation Order 2017 has
been in force, the CMA has written publicly to banks 35 times and
issued 5 sets of legally-binding directions – all to help banking
consumers receive correct and accurate information. To date,
customers have received more than £47m in refunds
