The Competition and Marketings Authority (CMA) has lambasted HSBC, Lloyds, TSB and Allied Irish Bank (AIB), with one bank failing to update its list of open and closed branches after more than 100 were shut down.
The four banks breached the Retail Banking Market Investigation Order 2017, the CMA states. This order outlines rules around informing customers about banks’ products and services.
Requirements include showing correct interest rates for loans, accurately displaying the right locations for bank branches and ATMs, and maintaining standards around data sharing for Open Banking in the retail sector.
The CMA accuses HSBC, Lloyds, TSB and AIB of breaches specifically relating to this latter requirement. The banking quartet were found to have failed to make correct data on products or services available to customers.
Dan Turnbull, Senior Director at the CMA, said: “People deserve banks they can trust to serve them well. Having correct information is essential when making important decisions about our finances.
“Banks handling our hard-earned money should have adequate processes in place to ensure this happens. It’s disappointing that seven years on, we have to put in place formal enforcement measures to secure better compliance from a major bank like HSBC which, yet again, is in breach of the rules.”
“The CMA will continue to closely monitor all banks’ compliance to ensure customers can clearly and confidently manage their finances.”
The breaches of data sharing rules are significant in the context of the UK’s Open Banking development. Both the government and the financial services industry as a whole are keen to solidify the UK’s position as a global leader – ensuring that bank’s adequately share data with their customers will be crucial to this.
TSB, Lloyds and AIB accounted for the least amount of braces. TSB failed to disclose the maximum amount customers would be charged for going into unarranged overdrafts on Personal Current Accounts.
Meanwhile, Lloyds failed to show the addresses of 363 of its ATMs, whilst AIB failed to make the correct annual rates for loans and overdrafts available. In both cases, the bank’s failed to share data with customers through Open Banking.
HSBC, however, is responsible for the bulk of breaches. Of note, the bank failed to update information of open and closed branches, with 167 closed branches listed as open and two open banks not listed at all.
UK retail banking has seen extensive closures over the past few years, largely due to more and more customers migrating to mobile and online platforms. So far, HSBC is the only bank the CMA has noted for failing to update its customers about these closures.
The bank also failed to keep some annual rates for business loans and overdrafts accurate on its website, informing some customers that the incorrect maximum amount they could be charged for going into unarranged overdrafts on personal current accounts.
A hSBC spokesperson said: “We are sorry for errors on our part which caused these breaches. When we discovered them we reported these to the regulator. We have taken steps to avoid a repeat of these issues in the future.”