Six high street banks have broken strict banking rules, including overcharging for overdrafts and failing to provide up-to-date information on interest rates. The banks found to have broken the rules are Bank of Ireland, Barclays, HSBC, Lloyds Banking Group, Metro Bank and NatWest.
Ninety-two Metro Bank customers have been refunded after being overcharged for their overdraft. The banks have been told to make changes to prevent further breaches of rules imposed by the Competition and Marketing Authority under the Retail Banking Market Investigation Order 2017.
Under the Order, banks and building societies are required to follow strict rules when it comes to informing customers of their services – from showing correct interest rates for current accounts, using accurate promotional materials online and within branches, to accurately displaying the right locations and opening times.
The breaches as outlined by the Government today are:
- Barclays failing to keep information on interest rates up to date for overdrafts on two of its webpages
- Bank of Ireland listing incorrect details of branch locations through Open Banking (after some had permanently closed) as well as wrong information about some current account charges. Tablet users were also not provided with a link to information on Bank of Ireland’s service quality via the banking app
- HSBC failing to publish information about the maximum amount it can charge customers for overdrafts in all the places it should have done. It also showed out of date information relating to interest rates for their business account overdrafts on one of its webpages
- Lloyds Banking Group publishing incorrect service quality rankings relating to personal and business current accounts in leaflets and branch posters which gave potential customers a misleading impression of its performance; and failing to keep information in relation to interest rates up to date for one of its overdrafts on one of its webpages
- Metro Bank overcharging 92 customers for entering an unarranged overdraft
- NatWest not updating records following branch and ATM closures. They also listed incorrect interest rates for small business loans when sharing information with independent price comparison tools
All six banks have confirmed they are making changes to their operations to prevent further breaches – ranging from destroying out of date promotional materials, to updating internal checklists and retraining staff. Metro Bank have also refunded the customers affected.
Adam Land, Senior Director at the CMA, commented: "We all have a right to expect up to date and correct information when making important decisions about our finances It’s therefore very disappointing that these six major banks have failed to uphold rules that have been in place for the last five years.
"Customers have been let down, some of whom will receive refunds, so these high street names must get their act together. "We will remain vigilant to ensure the rules are followed."
