HSBC, Lloyds, TSB, and AIB have been reprimanded by the Competition and Markets Authority (CMA) for failing to provide accurate information about loan interest rates, charges, branches, and ATMs. The CMA has stated that these breaches of the Retail Banking Market Investigation Order 2017 constitute a violation of competition rules. The CMA has sent letters to the banks outlining the breaches and issued directions on how to prevent future breaches.
HSBC, in particular, has been cited as having breached the order more extensively than the other banks. The CMA expressed concern over the number and significance of the breaches and questioned the bank’s ability to ensure its own compliance. Dan Turnbull, senior director at the CMA, expressed disappointment that major banks are still in breach of the rules seven years after they came into effect.
HSBC’s breaches include failing to keep accurate and up-to-date information about its branches, listing closed branches as open, and not listing open branches. The bank also failed to update its web pages when the Effective Annual Rate (EAR) was raised and published an incorrect Representative Annual Percentage Rate (APR) for loans. Additionally, an inputting error by a third-party contractor resulted in incorrect information being provided to customers about overdraft charges.
HSBC has self-reported all of these breaches within the required timeframe and has taken steps to address the issues. However, the CMA remains concerned about the bank’s ability to ensure compliance. In response, the CMA has directed HSBC to commission an external review of its processes and procedures, act on any recommendations made by the external reviewer, and provide training and reminders to staff.
Lloyds was warned by the CMA for its failure to publish the location of ATMs for over a month. The CMA found that the bank had not put sufficient safeguards in place before migrating ATM data to a new internal management system. AIB and TSB were also found to have breached the rules due to inaccurate information on loan rates and overdraft charges. Furthermore, both banks took too long to report the issues to the CMA.
In letters to the banks, the CMA stated that it does not intend to take further formal enforcement actions at this time, as steps have been taken by the banks to address the breaches. However, the CMA will closely monitor the banks to ensure ongoing compliance.
In response to the findings, an HSBC UK spokesperson apologized for the errors and stated that steps have been taken to prevent future issues. The banks involved will need to demonstrate their commitment to compliance and take action to ensure accurate and up-to-date information is provided to customers.
These breaches by major banks highlight the ongoing challenges in the banking industry when it comes to providing accurate information to customers. Despite regulations being in place for several years, it is concerning that these breaches continue to occur. It is essential for banks to prioritize compliance and take proactive measures to prevent future breaches. This will not only protect the interests of customers but also maintain trust in the banking sector as a whole.
