You are here: Home - Saving & Banking - News -

Nationwide to refund £900,000 to customers

0
Written by: Paloma Kubiak
06/02/2020
Around 70,000 Nationwide customers will share a refund of £900,000 after the lender broke rules in the way it warned overdraft users about going into the red.

Nationwide Building Society has been told to repay nearly a million pounds to thousands of current account customers as it failed to correctly warn them they would be charged for entering an unarranged overdraft.

Under Competition and Markets Authority (CMA) rules, customers with personal current accounts must receive a text alert warning of fees before banks charge them for an unarranged overdraft. This gives people time to take action and avoid unexpected fees.

While Nationwide did send text alerts, the messages didn’t contain a warning that customers would be charged.

The CMA said around 70,000 people were affected, and they were already known to Nationwide as having difficulty managing their accounts. The refunds will cover all fees incurred by customers going into an unauthorised overdraft, though the CMA doesn’t have the power to impose a fine.

This is the second time in just six months that Nationwide has breached this same banking order. In August, it was told to refund £6m to current account customers.

Adam Land, senior director of remedies, business and financial analysis at the CMA, said: “Banks and building societies that fail to send customers text alerts saying they will be charged if they enter an unarranged overdraft are breaking the rules. The fact that Nationwide is a repeat offender makes it even more serious.

“Following our action, it will now repay all affected customers, and quickly.”

‘This issue will not occur again’

The CMA added that Nationwide now has an independent auditor in place to review its processes.

Sara Bennison, chief marketing officer at Nationwide, said: “The CMA Directions, issued to Nationwide in August 2019, required the Society to complete an independent review of its processes in relation to text alerts. While all members received their texts on each and every occasion, this review identified that alerts sent to members who were in Collections did not explicitly state that they would be charged an unarranged overdraft fee.

“While these members haven’t been overcharged, we appreciate these texts are designed to help people avoid unarranged overdraft charges, so we apologise that on this occasion we didn’t meet the high standards we set ourselves. We are contacting impacted members and will be automatically refunding the charges back into their account.

“From 11 November 2019, the Society removed unarranged overdraft charges, so this issue will not occur again in the future.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Privacy Preference Center

Necessary

Advertising

Analytics

Other

Read previous post:
Millions with problem debt to be given 60-day ‘breathing space’

Millions of people trapped by problem debt will be given a 60-day grace period where interest, fees and enforcement action...

Close