RBS and Natwest have agreed to pay refunds to more than 36,000 customers, after wrongly charging them for unarranged overdrafts.
The lender said it’s made the pledge after an investigation found it unfairly charged customers for going overdrawn – without alerting them first.
Rules introduced in 2017 requires banks and building societies to send customers a text alert when they go overdrawn. However, RBS broke these rules.
A public letter from the Competition & Markets Authority (CMA) said RBS failed to enrol adult personal current accounts (PCAs), which were previously youth accounts, into a programme of alerts within 10 working days.
This first breach affected around 179,000 customers, plus 36,000 more between the period of February 2018 and December 2019.
RBS said it’s now compensating customers and providing 8% interest to those affected on top. This is equivalent to around £61 each.
The offer comprises £1.9million before interest and around £2.2million after.
The bank will also consider any "reasonable claims" for extra costs suffered due to the charges. RBS is aiming to refund customers by this summer.
Santander also recently put aside £17million to refund customers for six breaches of the order, announced by the CMA last year.
A total of 470,000 customers will all be refunded in full. This is on top of £2million in refunds by Santander already announced by the CMA in May 2019.
Last month, Metro Bank was ordered to refund £11.4million to 130,000 customers, and in February Nationwide promised to repay £900,000 to 70,000 account holders.
Back in November last year, HSBC was also told to refund a collective £8million to 115,000 customers.
A spokesperson for RBS said: "We apologise to any customers affected, we are contacting those customers to let them know to expect a refund of these charges and we have put systems in place to ensure that this does not happen again."
