NatWest Group banks fined for overcharging fees on credit cards

Four NatWest Group banks have been fined £1.82m by the Payment Systems Regulator (PSR) for overcharging interchange fees on credit cards.

The PSR took action against National Westminster Bank, Royal Bank of Scotland, Ulster Bank and Coutts & Company for failing to comply with the Interchange Fee Regulation (IFR).

As well as handing out fines, the PSR ensured that customers who were overcharged by the banks got their money back.

In its role as the main UK authority for enforcing the IFR, the PSR said it spotted the issue during regular monitoring activity, before opening an investigation in May 2018.

The regulator said the banks had incorrectly treated a number of cards as being ‘commercial’ cards when they should have been treated as ‘consumer’ cards. This meant that fees charged by the four banks weren’t capped and were set at a level too high – resulting in both acquirers and ultimately merchants being overcharged.

Managing director of the PSR, Chris Hemsley, said: “The interchange fee caps were put in place to reduce the cost of accepting customer card payments for shops and other merchants’ businesses. The banks broke the rules by failing to bring themselves in line with the caps.

“As soon as we identified the problem, we stepped in to make sure the banks put a stop to it. Not only have the banks reimbursed the fees to acquirers which they were not entitled to collect, but we have also fined them for their failings.

“As demonstrated in this case, we will intervene and take robust action where needed to ensure compliance, including with the IFR.”

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