The Competition and Markets Authority (CMA) has taken action against 5 of the UK’s biggest banks and building societies for breaching Part 6 of the Retail Banking Market Investigation Order 2017. This required that customers with personal current accounts must receive a text alert warning of fees before banks charge them for an unarranged overdraft. Receiving this alert is designed to give people time to take action and avoid any unexpected charges.

The total of just over £47 million comprises refunds secured since the CMA started enforcing the Order in 2018, including new refund amounts from Royal Bank of Scotland (RBS) and Santander.

RBS failed to send accurate text warnings to 36,000 customers, from February 2018 until December 2019, and has now agreed to fully repay the charges – as well as providing an additional 8% in interest – bringing the total it will refund to customers to £2.2 million. The CMA’s letter to RBS was published today.

Santander has put aside £17 million to refund customers for 6 breaches of the Order, announced by the CMA last year. This will impact up to 470,000 customers who will all be refunded in full. This is on top of £2m in refunds by Santander already announced by the CMA in May 2019.

Since 2018, the CMA’s action has also led to refunds for customers from 3 other banks and building societies of around:

• £11 million for current account holders at Metro Bank
• £8 million for current account holders at HSBC
• £7 million for current account holders at Nationwide

The CMA dealt with some of the worst breaches by issuing legally binding directions, which ensured that banks were committed to refunding those affected. In some cases, the banks and building societies also voluntarily offered to pay interest on the charges.

In December 2019, the Financial Conduct Authority introduced reforms to its own overdraft rules, expanding the requirement to send alerts to all overdraft charges. This meant it was no longer necessary for the CMA to retain Part 6 of the Order – the responsibility for this now sits with the FCA.

Andrea Coscelli, Chief Executive of the CMA, said:

Text alerts have been absolutely key in helping people to avoid unfair unarranged overdraft charges and, where banks have failed to comply, the CMA has worked to secure millions in refunds for customers.

While these breaches are disappointing – and may have been preventable had the CMA been able to issue serious financial penalties – our action has put a total of more than £47 million back into people’s pockets. With responsibility for enforcing this now sitting with the FCA, the dedicated sector regulator, we’re confident that this will continue.

Notes to editors

1. Part 6 of the Retail Banking Market Investigation Order 2017 came into force in 2018, after the CMA’s retail banking market investigation identified a number of competition problems in both the personal current account (PCA) and small and medium-sized enterprise (SME) banking markets. The Order is part of a package of remedies designed to address these problems.
2. The CMA has today published a letter to RBS about breaches of Part 6 of the Order.
3. The law prevents the CMA from imposing fines for breaches of either Orders or undertakings. This limits the CMA’s ability to ensure these breaches do not recur. However, Andrew Tyrie, Chair of the CMA, requested these powers to ensure proper deterrence as part of a package of wider reforms to the CMA’s powers in a letter to the then Secretary of State for Business, Energy and Industrial Strategy.
4. All media enquiries should be directed to the CMA press office by email on press@cma.gov.uk , or by phone on 020 3738 6460.

The CMA wrote to RBSG regarding breaches of Part 6 of the Order. RBSG breached the Order by failing to send out text alerts to customers who were previously youth account holders saying that they would be charged for entering an unarranged overdraft. RBSG will repay around £2.2 million in charges and interest to approximately 36,000 customers who went into or attempted to go into unarranged overdraft without first sending an alert to them.

• Loan will deliver key infrastructure to enable thousands of new homes
• First £15 million of contracts underway with local contractors

Government housing agency Homes England has agreed a £61 million investment with developer Urban&Civic plc which will begin the delivery of a 6,500 home community at Waterbeach in Cambridgeshire.

The infrastructure loan from the agency’s Home Building Fund will accelerate and broaden delivery of the site and in doing so, ensure direct support to the housebuilding sector as it remobilises following the Covid-19 pandemic.

The loan will fund key strategic infrastructure at Waterbeach, including roundabout improvements to create a main access route from the A10, road, drainage and utility works to open up the first phase of the development and community facilities.

Housing Minister Rt Hon Christopher Pincher MP said: “Building the homes we need is central to the mission of this Government, which is why we have safely reopened the housing market.

“This £61 million investment from Homes England, the Government’s housing accelerator, will deliver the building blocks of a community that people will be proud to call home, including a new primary school, health centre and community centre.”

Urban&Civic, in partnership with landowner the MOD, has secured outline planning permission to create 6,500 homes and five schools as well as commercial, retail, leisure and community facilities at the site, a former WW2 RAF Bomber Command airfield six miles north of Cambridge. The first phase of 1600 homes is currently progressing through planning, and early landscaping, archaeology and remediation work is underway.

Neil Milligan, Head of Infrastructure Finance at Homes England said: “Our investment in large scale, long term projects like Waterbeach demonstrates how our funding can help to accelerate the ambition of master developers like Urban & Civic in developing great places to live and work.

“Covid-19 has presented the industry with many challenges, and it’s great that despite these setbacks we can continue to secure agreements with our partners that build on our pipeline of investing in quality homes and communities and support the wider industry in its recovery.

“New housing remains a priority and whilst some work is temporarily paused, we continue to work to put the foundations in place for the new homes the country needs.”

The investment deal follows Homes England’s recent announcement of £180 million worth of land acquisitions in the last financial year, and assurances from Simon Dudley, interim Homes England Chair, that the agency is open for business.

Urban&Civic, who will act as master developer for the MOD for the 716 acre Waterbeach site, will award the first £15 million worth of contracts to local businesses in the next six months, providing a substantial windfall for the local economy.

Nigel Hugill, Chief Executive of Urban&Civic, said: “Waterbeach Barracks provides the most stunning lake side location and is much the largest development in the country to be started since the onset of Covid 19.

“The project will have all the characteristics typically associated with Urban&Civic; great schools; generous, fabulous and accessible green spaces; imaginative play areas; and next generation broadband, with an enduring emphasis on local and community. Cycle and bus connections are built in from the outset.

“Funds generated from initial rentals and house sales will be reinvested to further accelerate delivery with the continuing involvement of local contractors and the housebuilder supply chain.

“Partnership funding from Homes England is fundamental to that investment model. We would not attempt the same pace and ambition without their long-term loan support.”

Work is already under way with local consultants and partners to take forward detailed design on a range of additional transport measures, landscaping and an inspiring primary school in a woodland setting.

Surrounded by woodland and with a unique lakeside setting, Waterbeach will have sustainable design at its core, providing a futureproof, high quality place to live for people in Cambridgeshire.

Catherine Davies, DIO’s Head of Estates, said: “Waterbeach is a great example of the public and private sectors working together to fulfil a public need. This agreement marks a significant step forward in the process of redeveloping this World War 2 airfield to provide new homes and facilities for the people of Cambridgeshire.”

ENDS