NatWest is set to refund hundreds of business customers after it wrongfully forced them to open current accounts to secure a loan.
The Competition and Markets Authority (CMA) has found that NatWest breached banking rules on 'bundling' by forcing customers to open a fee-paying current account in order to secure a loan.
Over 700 small and medium-sized businesses will share up to £600,000 in refunds following the CMA's intervention. The watchdog has also ordered the bank to write to all affected SME customers with a business account to offer them the option of switching to a fee-free loan servicing account.
Adam Land, CMA senior director of remedies, says: "Forcing businesses to open costly current accounts to secure essential loans is unacceptable - and a direct breach of our rules, which have been in place for 20 years. NatWest should have known better. These rules are there for a reason: to make sure small businesses are treated fairly, and to make sure the market is competitive."
The move comes as part of the CMA’s crackdown on breaches of its banking rules. Over the past four years, it has put a stop to bundling by HSBC, Danske Bank, Clydesdale Bank, and Lloyds, as well as securing millions in refunds in relation to overdraft charges: £17 million for Santander customers, £11 million for Metro Bank customers, £8 million for HSBC customers, and £7 million for Nationwide customers.