HSBC and Santander to refund customers over unauthorised overdrafts

HSBC and Santander started breaking the rules in 2018

The two major banks will be refunding hundreds of thousands of customers.

HSBC and Santander customers will share a multimillion-pound windfall after the banks were told to pay back overdraft fees.

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 £8m to 115,000 customers, the CMA said today.

The Competition and Markets Authority (CMA) said HSBC had failed to text 115,000 customers when they went into an unarranged overdraft, and would have to refund them £8 million.

Most were informed the next day after the fees had already been billed. An spokesman for the bank said 35,000 customers were not contacted as they went into their overdrafts late.

The average refund for their customer is £69.57.


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 bank had missed sending texts to customers who had in the past signed up for email alerts, and also failed to update phone numbers properly, along with several other failures.

On its Everyday Current Account, Santander charges £6 per day for unauthorised overdrafts.

It said the two banks had started breaking the rule as soon as it came into force in February 2018. The text alerts are created to give customers time to move funds and avoid a bank charge.

The AMC said the banks broke the rules for the first time in February 2018, when it was revealed that if customers were using an uncovered overdraft between 10:45 pm and 11:45 pm, when balances were calculated, they were not informed by a text message.

Santander said it has undertaken a review so it can identify affected customers.

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