Friday 29 November 2019 7:26 am

HSBC and Santander must repay over £8m in overdraft fees

HSBC and Santander must refund customers to the tune of millions of pounds after failing to text customers who fell into unarranged overdrafts.

HSBC twice broke a legal requirement to text customers before charging them for falling into an overdraft and is refunding £8m to 115,754 customers.

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Santander broke the order six times and has agreed to refund customers, the Competition and Markets Authority (CMA) said.

But it has not confirmed the figure nor how many customers were affected.


The refunds will cover the fees customers incurred by falling into unarranged overdrafts.

“The CMA considers Santander’s failure to provide alerts to customers before those customers received charges in relation to exceeding pre-agreed credit limits or attempting to do so as a serious matter,” the watchdog said.

“To date, Santander has been unable to provide figures for the numbers of customers affected or the value of refunds to be made for each of the six breaches.”

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Text alerts were introduced in February 2018, when the breaches first occurred. They are designed to give customers time to take action to avoid any charges.

Both banks are now under orders to check their compliance with the order between February 2018 and December 2019.

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.” 

“Having been the first bank to auto-enrol customers to unarranged overdraft SMS alerts, and seeing that six in 10 of our customers who receive one then pay in money avoiding additional charges, we appreciate how helpful these text messages can be,” an HSBC spokesperson added.

“We apologise to those customers who for different reasons did not receive an alert. We will continue contacting customers who incurred overdraft charges as a result of these issues to apologise and provide a refund.”

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