Customers get compensation as six major banks break overdraft rules
SIX major banks have been criticized for breaking banking rules.
The banks that broke the rules are Bank of Ireland, Barclays, HSBC, Lloyds Banking Group, Metro Bank and NatWest.
Among the breaches, Barclays failed to keep interest rate information for overdrafts up to date on two of its webpages and it was also found that Metro Bank had overcharged 92 customers for entering into an unarranged overdraft.
Metro customers were reimbursed for the error and none of the other five banks owe compensation.
All six banks have been approached for comment, but all have already confirmed that they will be making changes to the way they operate following the breaches.
The rules they broke were imposed by the Competition and Markets Authority (CMA), a government body that promotes competition between businesses.
Under a 2017 CMA order, banks and building societies must follow strict rules when informing customers about their services.
These include displaying correct interest rates for checking accounts and using accurate promotional material online and in branches.
The specific violations were:
- Barclays does not keep interest rate information for overdrafts up to date on two of its web pages
- Bank of Ireland listing incorrect information on branches through Open Banking (after some have closed for good) as well as incorrect information on some checking account fees. Tablet users also did not receive a link to information on the quality of service from Bank of Ireland via the banking app
- HSBC does not publish information on the maximum amount it can charge customers for overdrafts in all the places it should have. Also to display outdated interest rate information for its business account overdrafts on one of its web pages
- Lloyds Banking Group published incorrect quality of service ratings for personal and business current accounts in leaflets and branch posters which gave potential customers a misleading impression of its performance; and failing to maintain up-to-date interest rate information for any of its overdrafts on any of its web pages
- Metro Bank overcharging 92 customers for taking an unarranged overdraft
- NatWest does not update records after branches and ATMs close. It also listed incorrect interest rates for small business loans when sharing information with independent price comparison tools.
All six banks confirmed they were making changes to their operations to prevent the breaches from happening again.
Changes include destroying outdated promotional material, updating internal checklists and retraining staff.
Adam Land, senior director of the CMA, said it was “disappointing” that the banks had breached the rules that had been in place for five years.
He added: “Customers have been disappointed, some of whom will be receiving refunds, so these big names need to pull themselves together.”
How do I file a complaint with my bank?
If you ever find yourself in a situation where you want to file a complaint with your bank, there are steps you can take to do so.
You can file a complaint in person, over the phone, or in writing by mail or email.
There are, however, a number of things to keep in mind.
Some of these include contacting the bank or building society as soon as possible, keeping track of when you contacted them as this could help validate your claim down the line, and collecting bank statements, check stubs and any correspondence you have had with them.
Little touches like writing the word “complaint” at the top of your letter can also help it get to the right department faster.
If you get stuck, you can always go to your local Citizen’s Advice branch.
If you don’t know where yours is, you can use its branch locator.