HSBC and Santander to refund millions in unauthorised overdraft charges
HSBC and Santander have been told by the UK markets regulator to pay back millions in unauthorised overdraft fees.
The banks were supposed to have systems in place that sent text messages to customers when they went in unauthorised overdrafts, but both banks failed to do so.
HSBC was found to have twice broken Part 6 of the Competition and Market Authority’s (CMA) Retail Banking Market Investigation Order and is refunding £8m 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 un-arranged 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 refunds paid by the banks cover all fees incurred by customers from going into un-arranged overdrafts where they had not been warned beforehand by the required text alerts.
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.