Metro Bank repays £10.5m for overdraft warning failure

Metro Bank has committed to repay more than £10.5m after it breached a legal order by failing to send texts warning people about unarranged overdraft charges.

The bank was found to have breached an order of the Competition and Market Authority (CMA) that requires banks to ensure customers with personal current accounts receive a text alert warning about charges before banks charge them for unarranged overdrafts. The CMA’s order is in place to give customers time to act so they can avoid unexpected fees.

The investigation found that Metro Bank failed to inform nearly 130,000 customers that they would be charged for entering an unarranged overdraft.

Although text alerts were sent, these did not inform customers that they would be charged, and the CMA found that the breach had been continuing since February 2018, when the order was introduced.

As well as refunding £10.5m in fees, Metro Bank has offered to pay back 8% interest on the charges – bringing the expected total remuneration to around £11.4m – while the bank said it would also consider reasonable claims for extra costs incurred by affected customers.

CMA senior director for remedies, business and financial analysis, Adam Land, said: “The text alerts we ordered banks to send to customers have been crucial in helping people avoid unexpected fees from entering an unarranged overdraft.

“While it is disappointing to see so many customers being charged wrongly, Metro Bank’s commitment to refund those affected – and to cover interest charges and consider claims for extra costs suffered – will put this right.”

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