HSBC : Santander UK to refund customers for breaking watchdog order

Britain's competition watchdog said HSBC and Santander UK had agreed to refund customers after they broke a legal order that ensures customers receive text alerts before banks charge them for going into an unarranged overdraft.

HSBC was found to have broken a part of the Competition and Market Authority's (CMA) Retail Banking Market Investigation Order twice and is
refunding 8 million pounds to 115,000 customers, the CMA said on Friday. (https://reut.rs/2Y7fpT3)

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, the watchdog added.

CMA said the breaches first occurred in February 2018 and the refunds paid by the banks cover all fees incurred by customers because of the failure to send text alerts, thereby not giving customers time to take action to avoid any charges.

An unarranged overdraft occurs when more money comes out of an account than the balance allows for, and there isn't an agreed overdraft in place.

The watchdog said it was also directing HSBC and Santander to do an independent check of their compliance with the legal order between February 2018 and December 2019, to send the text alerts on time.

The order came into force in 2018, after the CMA's retail banking market investigation identified a number of problems in both personal current accounts and small- and medium-sized enterprise banking markets.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta)

Stocks treated in this article : Banco Santander, S.A., Santander UK Plc, HSBC Holdings Plc