HSBC under fire for pushing loan customers to open bank accounts
A total of 210 loans worth more than £800,000 were affected, impacting 204 customers, the Competition and Markets Authority (CMA) revealed.
It added that the breaches occurred between 2002 and 2021 and HSBC reported itself to the CMA between July 2020 and May 2021.
HSBC confirmed it wrote to impacted customers in September 2021 to waive the non-compliance clauses from the relevant loan agreements.
The banking giant also offered refunds of all business current account charges, and reminded affected customers that they’re not required to open or maintain the current account in order to have a loan with it.
Following previous failures to comply with SME banking undertakings, the CMA has imposed legally binding directions on HSBC, requiring it to undertake an independent assurance report and meet specific standards in relation to staff training.
Further, it will monitor HSBC’s compliance.
CMA senior director, Adam Land, said: “The rules are clear – banks should not ask customers to open or retain business accounts in order to have a loan with them.
“It is right that HSBC have offered refunds and we will monitor compliance with our directions closely to ensure this doesn’t happen again.”
An HSBC UK spokesperson, said: “We are sorry that an error in our legal documentation for 200 predominantly Scotland-based customers, resulted in us potentially hindering them from switching banks.
“We have apologised to the customers concerned and have proactively refunded all fees and charges that they incurred during the period that those terms and conditions were applicable. We have been working closely with the CMA and have made changes to our processes and procedures to ensure that we are fully complaint with the undertakings.”