HSBC and Santander customers are set for a multi-million pound windfall after the Government ordered them to refund customers who had not been texted as they went into an unarranged overdraft.
HSBC, which broke the Competition and Markets Authority's (CMA) rules twice, has agreed to pay £8 million to 115,000 customers, while Santander broke the rules six times, and will refund its customers, but has yet to work out by how much.
The CMA has told the banks to refund customers for all the fees they incurred when going into their overdrafts when they had not been warned ahead of time by text.
Both banks have also been ordered to bring in outside help to review their compliance with the CMA's rules.
The authority said the breaches first occurred in February 2018 when new rules on overdrafts came into force.
The investigation noted that HSBC has expressed its regret that the breaches had happened and provided a "commitment to refunding all customers affected by the breaches".
Santander said it has undertaken a review so it can identify affected customers.
A number of banks are set to follow Nationwide Building Society which has announced plans to overhaul the way it charges for arranged overdrafts.
The aim is to make the products simpler for consumers to understand and compare.
The changes, being introduced by the Financial Conduct Authority (FCA), will be in force by April 6, 2020.
The FCA has vowed to shake up the "dysfunctional" overdraft market - including stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts.
