HSBC and Santander will have to give money back to thousands of customers, after charging them for entering into overdrafts without any warning.
It was found that HSBC broke the overdraft rules twice, whereas Santander was found to have broken these rules six times.
Breaking overdraft rules
Both banks will now have to give back millions of pounds after. The Competition and Markets Authority (CMA) explained that both HSBC and Santander agreed to refunds for their actions, which took place in February 2018.
These refunds will cover all fees that customers were charged after going into unarranged overdrafts, as they had not been warned by text alerts.
It was found that HSBC broke the overdraft rules twice, whereas Santander was found to have broken these rules six times (Photo: Shutterstock)
Over £8 million is due to be refunded to around HSBC customers, while Santander has not yet said how many people they are set to refund.
The CMA found that HSBC broke the rules due to them having a policy of not disturbing customers after 10.45pm. This then meant that if customers went into an unarranged overdraft between 10.45pm and 11.45pm, which is when balances were calculated, they were not alerted to this by text.
These alerts would have given customers time to move funds and avoid any charges, but instead, most customers were alerted about this the next day, when fees had already been charged by then.
Around 115,000 HSBC customers are set to be refunded, but the full scale of both of HSBC’s breaches will not be available until next summer.
The CMA said, “The CMA notes though that confirmation of the size and scale for both breaches will not be available until August 2020.”
Santander missed sending texts to customers who had signed up for email alerts in the past.The bank also failed to update phone numbers properly, along with a multitude of other errors.
A Santander spokesperson said, “We are very sorry that some customers in certain circumstances were not sent the required overdraft alerts. The introduction of these alerts is a move we welcomed and believe is a real support to customers.
“We have carried out a detailed review to understand why the errors happened and have taken steps to fix the issues. We are now working to identify and refund all affected customers as quickly as possible.”
This article was originally published on our sister site, Yorkshire Evening Post.