Metro Bank to return £11.4m to customers after breaching unarranged overdraft charge rules
Metro Bank is to return £11.4m to customers after it breached a legal order by failing to send texts warning people about unarranged overdraft charges.
The Competition and Markets Authorty (CMA) said the bank breached Part 6 of the Competition and Market Authority’s (CMA) Retail Banking Market Investigation Order 2017 which requires banks to warn customers by text before levying fees for unarranged overdrafts.
The CMA found Metro Bank failed to warn nearly 130,000 customers that they would be charged for entering unarranged overdrafts.
Texts were sent but they did not want customers about charges they would face and some of the texts were sent later than they should have been.
As well as refunding £10.5m in fees, Metro Bank has offered to pay eight per cent interest on the charges bringing the total payout to around £11.4m. It will also consider reasonable claims for extra costs incurred by affected customers.
Metro Bank said it made a provision in its 2019 results for the return of cash to customers.
Adam Land, CMA senior director for remedies, business and financial analysis, said: “The text alerts we ordered banks to send to customers have been crucial in helping people avoid unexpected fees from entering an unarranged overdraft.
“While it is disappointing to see so many customers being charged wrongly, Metro Bank’s commitment to refund those affected – and to cover interest charges and consider claims for extra costs suffered – will put this right.”
David Thomasson, chief commercial officer at Metro Bank, says: “We are very sorry that we didn’t include all the information we should have done on our overdraft text alerts, and that on certain occasions some customers did not receive these alerts before 10am as they should have done.
“This isn’t the level of service that we pride ourselves on providing and we are now contacting any customers who have been impacted to put things right for them as quickly as possible.”