Nationwide Building Society failed to correctly warn their customers for entering into an unarranged overdraft and are to be refunded a total of £900,000.
The competition watchdog said Nationwide was found to have broken an order which says customers must receive a text alert warning of fees before the Building Society can charge them for an unarranged overdraft.
Although Nationwide did send customers a text alert, the message did not tell customers they will be charged said, the Competition and Markets Authority (CMA).
Sara Bennison, chief marketing officer at Nationwide Building Society said, “The CMA directions, issued to Nationwide in August 2019, required the society to complete an independent review of its processes in relation to text alerts.
“While all members received their texts on each and every occasion, this review identified that alerts sent to members who were in collections did not explicitly state that they would be charged an unarranged overdraft fee.
“While these members haven’t been overcharged, we appreciate these texts are designed to help people avoid unarranged overdraft charges, so we apologise that on this occasion we didn’t meet the high standards we set ourselves.
“We are contacting impacted members and will be automatically refunding the charges back into their account.
“From 11 November 2019, the society removed unarranged overdraft charges, so this issue will not occur again in the future.”
This is the second time Nationwide in six months the CMA has taken action against the Building Society, as they previously secured £6m in refunds for customers in August 2019.
Adam Land, senior director of remedies, business and financial analysis at the CMA said, “Banks and building societies that fail to send customers text alerts saying they will be charged if they enter an unarranged overdraft are breaking the rules.
“The fact that Nationwide is a repeat offender makes it even more serious.
“Following our action, it will now repay all affected customers, and quickly.”
Nationwide are contacting customers and they will be refunded automatically.