Nationwide to refund £900,000 to customers after breaking overdraft rules twice in six months
Nationwide will issue a refund of £900,000 to customers after failing to correctly warn them that they would be charged for entering into an unarranged overdraft.
Nationwide Building Society will repay just under a million pounds shared between 70,000 current account customers.
This comes after the building society failed to correctly warn its customers that they would be charged for entering into the red.
The rules, under Competition and Markets Authority (CMA), are that customers with personal current accounts must firstly receive a text alert warning of fees before banks go ahead and charge them for entering into an unarranged overdraft.
These rules are in place in order to give people time to both take action and avoid any unexpected fees.
Although Nationwide did send text alerts, the messages that they sent out to customers did not contain a warning that they would be charged.
70,000 customers to be refunded
The CMA has said that around 70,000 people were affected, and that these customers were known to Nationwide as having trouble managing their accounts.
The refunds that are due to be issued will cover all of the fees incurred by customers who entered into an unauthorised overdraft.
In August 2019, Nationwide also broke the same rules, and was told to refund £6million to its current account customers.
‘Nationwide is a repeat offender’
According to the CMA, Nationwide now has an independent auditor in place which will review the building society's processes.
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.”
Mr Land added: ‘This issue will not occur again.’