Yahoo Finance Metro Bank to repay £10.5m in overdraft fee refunds
Metro Bank (MTRO.L) has promised to pay out over £10.5m ($13m) in refunds after breaching rules about unplanned overdraft alerts.
The bank failed to ensure that customers with personal current accounts received a text alert warning about fees before charging them for unarranged overdrafts.
As well as refunding £10.5m in charges, Metro Bank has offered to pay back 8% interest on the fees bringing the expected total cost of the refunds to about £11.4m.
An investigation by the Competition and Market Authority (CMA) found that Metro Bank did not inform almost 130,000 customers that they would be charged for entering an unarranged overdraft.
The bank did send text alerts but these did not inform customers that they would be charged.
READ MORE: HSBC and Santander to refund millions for overdraft text failures
Metro bank’s infringement of the rules has been happening since February 2018 when the CMA introduced the rules mandating the text alerts.
Adam Land, CMA senior director for remedies, business and financial analysis, said: “The text alerts we ordered banks to send to customers have been crucial in helping people avoid unexpected fees from entering an unarranged overdraft.
“While it is disappointing to see so many customers being charged wrongly, Metro Bank’s commitment to refund those affected — and to cover interest charges and consider claims for extra costs suffered — will put this right.”
Thousands of Nationwide Building Society (NBS.L) customers were refunded a total of £900,000 in February after failing to correctly warn them they would be charged for entering an unarranged overdraft.
Last year, HSBC (HSBA.L) and Santander (SAN.MC) handed millions of pounds back to over 100,000 customers, after the two banks breached the rules.
