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29 November 2019, 10:53 | Updated: 29 November 2019, 11:07
The two major banks will be refunding hundreds of thousands of customers.
Those who have accounts with HSBC and Santander could be owed money as the banks are now being forced to pay back unarranged overdraft fees.
The Competition and Markets Authority (CMA) said HSBC has to shell out £8 million to 115,000 customers after they failed to notify them when they’d gone into an unarranged overdraft.
HSBC said it didn't send texts to customers after 10.45pm as it felt it was an ‘unsociable time’ to be contacted by the bank.
This meant that if customers went into an unarranged overdraft between 10.45pm and 11.45pm, when balances were calculated, they weren't told until the next day, after fees had already been charged.
Those who have HSBC’s Everyday Account and Advance Bank Account are charged £5 a day if they go into the red, and up to £80 monthly.
The average refund for their customer is £69.57.
Meanwhile, Santander also breached the rule in six different ways, but is yet to confirm how many users are affected or how much it will pay out.
The bank missed sending texts to customers who had previously signed up for email alerts, and also failed to update phone numbers properly.
On its Everyday Current Account, Santander charges £6 per day for unauthorised overdrafts.
Santander 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."
Watchdog CMA said in a statement: “The refunds paid by the banks cover all fees incurred by customers from going into unarranged overdrafts where they had not been warned beforehand by the required text alerts.”
They added that the two banks had started breaking the rule as soon as it came into force in February 2018, and ordered them to review their compliance using an outside body.