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The Competition and Markets Authority (CMA) has found that six large banks breached its retail banking market investigation order.
According to the CMA, Lloyds Bank, Barclays, HSBC, NatWest, Metro Bank and Bank of Ireland breached its 2017 order by displaying inaccurate information to their consumers on a number of occasions.
The market investigation order requires banks and building societies to follow strict rules when it comes to informing customers of their services.
These include obligations to show correct interest rates for current accounts, use accurate promotional materials online and within branches, and accurately display the right locations and opening times.
“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 6 major banks have failed to uphold rules that have been in place for the last 5 years,” said Adam Land, senior director at the CMA.
CMA findings and concerns
Addressing the six banks alphabetically, the CMA found Bank of Ireland had displayed wrong information about some current account charges and listed incorrect details of branch locations through open banking APIs even after some branches had closed permanently.
The bank also failed to enable tablet users to see information on its service quality (SQIs) via a link on the banking app, which may have caused some consumers or small businesses to miss out on important information, the CMA said.
“In this case, consumers using a tablet may not have known that of the four SQIs relating to [personal current accounts], Bank of Ireland are currently ranked 9th, 10th, 9th and 8th out of ten providers in Northern Ireland. Had customers using a tablet known this, they may have considered switching to a higher-scoring competitor.”
In a separate letter to Barclays, the CMA said the bank failed to keep information on interest rates up to date for overdrafts on two webpages.
“The requirement for providers to display the cost of unsecured overdrafts prominently on their websites, and for this information to be kept accurate and up to date, is an important element of our remedies to address the concerns found in the Retail Banking Market Investigation,” the document says.
“This measure, in combination with other remedies, was designed to make it easier for SMEs to compare the cost of unsecured overdrafts and choose the best product for their needs.”
Meanwhile, HSBC failed to publish information about the maximum amount it can charge customers for overdrafts “in all the places it should have done”.
“The failure to ensure the public website displayed up-to-date rates for its Unsecured Business Overdraft may have led to SMEs not making a fully informed decision as to whether HSBC’s product was right for them,” according to the regulator.
The bank also showed out-of-date information relating to interest rates for their business account overdrafts on one of its webpages.
The CMA found that Lloyds Banking Group presented 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.
It also failed to keep information in relation to interest rates up to date for its overdraft on one of its webpages.
Metro Bank was found to have overcharged 92 customers for entering an unarranged overdraft between 2017 and 2022.
“The CMA is concerned that Metro Bank was unaware that customers were being charged more than the [monthly maximum charge] from August 2017 until January 2022,” the letter reads.
Although the bank notified the agency of the breach proactively and refunded the total of £20,773 to affected customers, the CMA said it will monitor Metro Bank’s “future compliance closely”.
Finally, NatWest listed incorrect interest rates for small business loans when sharing information with independent price comparison tools and did not update its records following branch and ATM closures.
All six banks have confirmed they are making changes to their operations to prevent further breaches.
Since the publication of the retail banking market investigation order in 2017, the CMA has written to banks 22 times and issued four sets of legally-binding directions.
To date, customers have received more than £47m in refunds as a result of these actions.
