Four UK banks rebuked by the UK’s competition watchdog for failing to meet rules

Four major UK banks, including Lloyds, AIB, TSB, and HSBC, have been rebuked by the country’s competition watchdog, the Competition and Markets Authority (CMA).

What did the banks do?

According to the CMA, the four mentioned banks failed to meet the standing rules on providing customers with clear and updated information.

In the case of HSBC, the bank listed 167 closed branches as still being open, which was misleading to the customers. On top of that, it also provided incorrect information regarding business loans and overdraft rates, according to the UK regulator.

TSB made its own mistakes, such as failure to disclose the maximum amount customers would be charged for if they entered unarranged overdrafts. As for AIB, the bank did not make information about the correct annual rates available for some loans and overdrafts. The information was missing through Open Banking and on its own website, and by withholding this information, its customers failed to prepare to meet their requirements.

Finally, Lloyds also earned its place on the list by failing to make available addresses of as many as 363 ATMs through Open Banking.

The CMA issued public letters to the four lenders

The Competition and Markets Authority responded to these failures to meet the rules by issuing four public letters to the four lenders. So far, Lloyds, AIB, and TSB have responded by agreeing to make the necessary changes that would make them compliant.

However, when it comes to HSBC, which has breached the order more extensively according to the regulator, the bank was given detailed directions on how to remedy the situation. The directions also include an action plan that the bank must follow.

Commenting on the situation, the CMA’s senior director, Dan Turnbull, stated that people deserve banks that they can trust to serve them well. This is why it is imperative to have correct information, especially when it comes to making important decisions involving their finances. He added that the banks that handle their customers’ hard-earned money should have adequate processes in place to ensure that their users can make such decisions.

After all, users cannot make well-informed decisions if they are unaware of their obligations and the consequences of such decisions, which often involve large amounts of money.

Turnbull added that it is disappointing that 7 years on, the CMA has to put in place formal enforcement measures to make sure that established banks like HSBC are compliant with the rules and regulations. He also stressed that this is not the first time that HSBC was caught breaching the rules.