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HSBC and Santander customers to get £8m in refunds over overdraft breaches
'We are very sorry that some customers in certain circumstances were not sent the required overdraft alerts'
by Helen Carter, https://www.manchestereveningnews.co.uk/authors/helen-bennicke/More than £8 million will be refunded to HSBC and Santander customers after the banks failed to alert hundreds of thousands of account holders that they had gone into an unauthorised overdraft.
HSBC is required to pay back the money to 115,000 customers after failing to adhere to banking rules that require a text message alert to be sent to them warning they have gone into the red without authorisation.
The alerts are intended to give customers an opportunity to move money into their accounts to avoid a bank charge but the banks first breached the rules in February 2018.
But the Competition and Market Authority said HSBC had broken the legal order on two occasions and Santander on six occasions.
HSBC has said the technical problem relating to one of the breaches would not be fully fixed until June 2020 and until that time, its customers will continue to be charged for unauthorised overdrafts.
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The bank said it was committed to "refunding charges incurred on an ongoing basis so affected customers will not be worse off".
(Image: PA)
HSBC broke the rules as it had a policy of not disturbing customers after 10.45pm, the Competition and Market Authority found.
It meant that if customers went overdrawn between 10.45pm and 11.45pm, when balances were calculated, they would not receive a text alert.
Santander has not been able to provide the Competition and Market Authority with information on how many customers have been affected by its breaches and how much money it will refund.
The refunds will cover fees incurred by customers who went into unarranged overdrafts where they had not been warned ahead of time.
A spokesman for Santander apologised to customers said it had fixed the problem with its alert notification system.
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.”
(Image: Money Bright/ www.moneybright.co.uk)
It is the second occasion Santander had broken the text ruling - in May 2019 it said it would refund £1.4 million in overdraft fees involving 20,000 current account customers.
And in August, the CMA ordered Nationwide building society to refund £6 million in charges to hundreds of thousands of overdrawn customers after failing to send the correct text warnings, after it broke the rules on 20 occasions.
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