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HSBC has been reprimanded by the UK competition watchdog for a second time over failings in relation to overdraft fees, as the regulator wrote to four high street lenders for breaching its rules.
HSBC, Lloyds, TSB and Allied Irish Bank had all received letters setting out breaches of the watchdog’s banking order, the Competition and Markets Authority said on Thursday.
HSBC has also been given legally binding directions to shore up its internal processes — a rare step from the regulator and the second time it has taken such a move against the bank.
The breaches by the four lenders range from incorrect or a lack of information in relation to maximum charges for customers entering unarranged overdrafts to a failure to provide addresses for the locations of cash machines.
Between October 2023 and February 2024, HSBC published an incorrect value for its maximum monthly charge in relation to unarranged overdraft fees, with 310 ATMs displaying the amount as £35 rather than £20 when users tried to withdraw cash, the CMA said.
HSBC was also singled out for failing to openly tell customers that 167 of its branches had closed.
The regulator introduced an order in 2017 requiring banks to follow strict rules in relation to customer information on their services after it found competition concerns in the retail banking market.
Under the order, banks must ensure communications around information such as interest rates are kept up to date on their sites.
Since the rules came into force, the CMA has written 35 public letters to banks and issued five sets of legally binding directions, including the latest to HSBC. Other banks to have received legally binding orders include Monzo in 2022 for not providing thousands of departing customers with their historic financial transactions.
HSBC was previously given the more serious directions by the CMA, along with Santander, for failing to send text alerts to customers before charging them for going into unarranged overdrafts.
“It’s disappointing that seven years on, we have to put in place formal enforcement measures to secure better compliance from a major bank like HSBC which, yet again, is in breach of the rules,” Dan Turnbull, CMA senior director, said in a statement.
The watchdog has no powers to issue financial penalties under the order. Customers have received £47mn in refunds since the rules were introduced.
HSBC UK said the bank was “sorry for errors on our part which caused these breaches. When we discovered them we reported these to the regulator. We have taken steps to avoid a repeat of these issues in the future.”
Lloyds said it had notified the CMA of the issue and that there “was no evidence of detriment to customers at any point, as they remained able to find the information through our websites and LINK’s ATM locator”.
AIB did not immediately respond to a request for comment. TSB declined to comment.
