The Competition and Markets Authority (CMA) has revealed it secured more than £47m in refunds over the last two years for customers whose banks failed to properly warn them about unarranged overdraft charges.

The regulator has taken action against five of the UK’s biggest banks and building societies in the last two years, 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 CMA said that its total of just over £47m comprises refunds secured since it 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 £2.2m.

Santander has also put aside £17m to refund customers for six breaches of the Order, announced by the CMA last year, which 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 three other banks and building societies of approximately £11m for current account holders at Metro Bank, £8m for current account holders at HSBC, and £7m for current account holders at Nationwide.

In December 2019, the FCA 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, and the responsibility for this now sits with the FCA.

Chief executive of the CMA, Andrea Coscelli, commented: “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 £47m 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.”

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