Press release

Metro Bank customers receive £10.5m overdraft fee refund

Metro Bank has committed to repay more than £10.5 million after it breached a legal order by failing to send texts warning people about unarranged overdraft charges.

From:
Competition and Markets Authority
Published
20 April 2020
Image of bank cards

The bank was found to have breached Part 6 of the Competition and Market Authority’s (CMA) Retail Banking Market Investigation Order 2017. This requires banks to ensure that customers with personal current accounts receive a text alert warning about charges before banks charge them for unarranged overdrafts, so they have time to act and can avoid unexpected fees.

The CMA’s investigation found that Metro Bank failed to inform nearly 130,000 customers that they would be charged for entering an unarranged overdraft. Although text alerts were sent, these did not inform customers that they would be charged. This breach has been continuing since February 2018, when the Order was introduced. Additionally, some of these alerts were sent later than they should have been.

As well as refunding £10.5 million in fees, Metro Bank has offered to pay back 8% interest on the charges bringing the expected total remuneration to around £11.4 million. It will also consider reasonable claims for extra costs incurred by affected customers.

Adam Land, CMA Senior Director for Remedies, Business and Financial Analysis, said:

The text alerts we ordered banks to send to customers have been crucial in helping people avoid unexpected fees from entering an unarranged overdraft.

While it is disappointing to see so many customers being charged wrongly, Metro Bank’s commitment to refund those affected – and to cover interest charges and consider claims for extra costs suffered – will put this right.

Read the CMA letter to Metro Bank.

Notes to editors

  1. Part 6 of the Retail Banking Market Investigation Order came into force in 2018, after the CMA’s retail banking market investigation identified a number of competition problems in both the personal current account (PCA) and small and medium-sized enterprise (SME) banking markets. The Order is part of a package of remedies designed to address these problems.

  2. The responsibility for enforcing the sending of text alerts was transferred to the Financial Conduct Authority in December 2019. 

  3. The total number of Metro Bank customers affected was 128,564.

  4. For press queries, email press@cma.gov.uk or call 020 3738 6460

Updates to this page

Published 20 April 2020