Customers who were incorrectly charged for going into an unarranged overdraft are in line to have £900,000 returned to their accounts.
70,000 customers are to get refunds after warning texts failed to tell them about charges that were going to be applied.
The money will go to Nationwide customers, reports The Mirror.
HSBC and Santander have also been told to hand back cash.
Nationwide's Sara Bennison said: “While these members haven’t been overcharged, we appreciate these texts are designed to help people avoid unarranged overdraft charges, so we apologise that on this occasion we didn’t meet the high standards we set ourselves.
"We are contacting impacted members and will be automatically refunding the charges back into their account."
She added: “From 11 November 2019, the Society removed unarranged overdraft charges, so this issue will not occur again in the future.”
It is the second time in six months that the Competition and Markets Authority has taken action against Nationwide having secured £6 million in refunds for affected customers in August 2019.
CMA director Adam Land said: “Banks and building societies that fail to send customers text alerts saying they will be charged if they enter an unarranged overdraft are breaking the rules.
"The fact that Nationwide is a repeat offender makes it even more serious."
He added: “This is exactly the sort of issue we would expect to fine companies for in future, if the Government gives us the increased powers we’ve asked for."
