Four major banks breached rules to help keep customers informed
Lloyds, TSB and AIB have confirmed they are making changes and HSBC has been issued with directions, the Competition and Markets Authority said.
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Your support makes all the difference.Four major high street banks failed to comply with banking rules to keep customers informed, the competition watchdog said.
Among the incorrect information given by the banks about their products or services, HSBC listed 167 closed branches as still being open.
HSBC has been directed by the Competition and Markets Authority (CMA) to make changes and HSBC, Lloyds, TSB, and Allied Irish Bank (AIB) have been issued with public letters.
Under the retail banking market investigation order 2017, banks and building societies are required to follow certain rules when informing customers about their products and services.
This includes showing correct interest rates for loans and accurately displaying the right locations for bank branches and ATMs.
The order also put in place “open banking”, an initiative which set high standards for transparent and secure data sharing for retail banking services in the UK.
It enables a wide range of data on products and services to be used by third parties to create apps and to improve services and help people to find the right financial product for their needs.
HSBC, Lloyds, TSB and AIB failed to make available correct data on their products or services, the watchdog said.
It said HSBC failed to keep information about its branches accurate and up-to-date, with 167 closed branches listed as still being open and two open branches not listed.
HSBC failed to keep some of its annual rates for business loans and overdrafts accurate and up-to-date on its website.
The bank also told some customers the incorrect maximum amount they would be charged for going into unarranged overdraft on their personal current accounts.
Having correct information is essential when making important decisions about our finances
TSB failed to disclose the maximum amount customers would be charged for going into unarranged overdraft on their personal current accounts.
AIB failed to make available the correct annual rates for some loans and some overdrafts through open banking and on its own website.
Lloyds failed to make available the addresses of 363 ATMs through open banking.
Lloyds, TSB and AIB have confirmed they are making changes to their operations to prevent further breaches, ranging from enhancing their internal procedures to improving oversight by senior managers, updating internal checklists and retraining staff, the CMA said.
In the case of HSBC – which the CMA considers has breached the order more extensively in this situation – added measures have been put in place to prevent future breaches.
The CMA has issued HSBC with detailed directions which include an action plan to ensure full compliance in future.
Dan Turnbull, senior director at the CMA, said: “People deserve banks they can trust to serve them well.
“Having correct information is essential when making important decisions about our finances. Banks handling our hard-earned money should have adequate processes in place to ensure this happens.
“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.
“The CMA will continue to closely monitor all banks’ compliance to ensure customers can clearly and confidently manage their finances.”
Since the retail banking market investigation order 2017 has been in force, the CMA has written publicly to banks 35 times and issued five sets of legally binding directions, to help banking consumers receive correct and accurate information.
To date, customers have received more than £47 million in refunds, the CMA said.
An HSBC UK spokesperson said: “We are 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.”