HSBC and Santander have agreed to refund customers after they both broke a legal order for unarranged overdraft charges.
An investigation by the Competition and Markets Authority (CMA) found that HSBC has twice broken Retail Banking Market Investigation Order and will now refund £8 million to 115,000 customers. Santander broke the Order 6 times and 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 Order ensures customers receive text alerts before banks charge them for going into an unarranged overdraft, giving them 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 CMA is also directing HSBC and Santander to undertake an independent check of their compliance with Part 6 between February 2018 and December 2019.