HSBC and Santander are to refund millions of pounds to customer who incurred overdraft fees after the banks broke rules on sending text alerts to customers to warn them they were about to go into the red.
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 six 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.
HSBC fell foul of an inhouse antisocial hours policy that forbade the lender from texting customers after 10.45 pm. Computer formatting errors also led to some customers not receiving texts that had been sent.
The breaches first occurred in February 2018, when the new rules came into force.
The competition watchdog is also directing HSBC and Santander to undertake an independent check of their compliance with Part 6 between February 2018 and December 2019.