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Nationwide to refund £6m to customers for overdraft alert failings

Nationwide has been ordered to refund over 320,000 personal current account customers for failings on overdraft charges.

The Competition and Markets Authority (CMA) said the lender was to hand back a total of £6m for breaking rules which demand people receive a text alert before banks charge them for unarranged overdrafts.

The aim of the message is to give customers time to take action to avoid unexpected charges.

The regulator said its order governing the action was broken more than 20 times – dating back to early last year.

The CMA also expressed frustration that it currently lacked powers to fine companies in such cases.

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Adam Land, its senior director for remedies, business and financial analysis, said: “The text alerts we ordered banks to send to customers if they are about to slip into an unarranged overdraft are key to helping them avoid unexpected fees.

“Nationwide failed to do this on numerous occasions and our action today makes it clear they must fix this as a matter of urgency.

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“It’s imperative that these problems are sorted out immediately and that they don’t occur again.

“Although we are pleased that Nationwide is going to reimburse customers affected, the CMA needs stronger powers for cases like this which is why we are seeking the ability to impose fines when firms breach our orders.”

Nationwide said it was sorry for the breaches – saying the majority related to the wording used in the text alerts and not a failure to send the warnings.

Its statement said: “Nationwide has sent over 19 million alerts since the rules were introduced.

“We have engaged proactively with the CMA to review these incidents, which were first reported to them in 2018 and the wording was corrected in November 2018.

“We have implemented improvements and additional controls to ensure this does not happen again.

“These controls are currently being reviewed by independent third parties.

“As an organisation that prides itself on service, we apologise for these incidents and any inconvenience caused.

“We have started the process for refunding members and will ensure no one is left out of pocket.”

SOURCE : https://news.sky.com/story/nationwide-to-refund-6m-to-customers-for-overdraft-failings-11780101

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