By Anna Ellis •
Published: 31 Aug 2022 • 13:30
UK bank NatWest breaks banking rules and owes £600,000 to customers. Image: UK government/Competition and Markets Authority
The Competition and Markets Authority (CMA) has found that NatWest breached CMA banking rules by forcing business customers to open a business current account, which incurs fees, in order to secure a loan – a practice known as ‘bundling’, the UK government confirmed on Wednesday, August 31.
As such, hundreds of businesses have been charged monthly for a business account that they may not have wanted or needed. It also limited businesses’ choice as they were unable to hold an account with a separate provider, which may have better met their requirements.
The breach lasted for over 3 years, with NatWest failing to alert the CMA until January 2021. Having scrutinised the error more closely, the CMA became aware the bank had signed certain customers up for a business account when they had specifically requested to have a fee-free account.
Adam Land, CMA Senior Director of Remedies, said: “Forcing businesses to open costly current accounts to secure essential loans is unacceptable and a direct breach of our rules, which have been in place for 20 years.”
“NatWest should have known better. These rules are there for a reason: to make sure small businesses are treated fairly, and to make sure the market is competitive,” he added.
The CMA has now issued legal directions to NatWest, and the bank is in the process of refunding affected customers. NatWest will now write to all affected SME customers with a business account to offer them the option of switching to a fee-free loan servicing account.
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Originally from Derbyshire, Anna has lived in the middle of nowhere on the Costa Blanca for 19 years. She is passionate about her animal family including four dogs and four horses, musicals and cooking.
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