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The UK Competition & Markets Authority on Wednesday fined NatWest Group PLC for coercing customers to open current accounts that cost money in order to secure a loan.
The CMA ordered the Edinburgh-based bank to pay back a total sum of £600,000 to over 700 small and medium-sized businesses.
‘Hundreds of businesses have been charged monthly for a business account that they may not have wanted or needed. It also limited businesses' choice as they were unable to hold an account with a separate provider, which may have better met their requirements,’ the CMA explained.
Further, ‘the breach lasted for over 3 years, with NatWest failing to alert the CMA until January 2021. Having scrutinised the error more closely, the CMA became aware the bank had signed certain customers up to a business account, when they had specifically requested to have a fee-free account.’
Forcing businesses to open accounts to secure essential loans is a direct breach of CMA rules, Adam Land, senior director of Remedies, explained. ‘These rules are there for a reason: to make sure small businesses are treated fairly, and to make sure the market is competitive,’ he said.
The CMA explained that the move is a part of its crackdown on breaches of banking rules, having stopped product bundling by HSBC Holdings PLC, Danske Bank AS, Clydesdale Bank PLC and Lloyds Banking Group PLC.
NatWest shares were 0.6% lower at 247.60 pence each in London on Wednesday afternoon.
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