Metro Bank to repay customers £10.5m
The lender breached overdraft rules and will refund 130,000 customers by summer 2020.
22nd April 2020 10:00
by Brean Horne from interactive investor
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The lender breached overdraft rules and will refund 130,000 customers by summer 2020.
Some 130,000 customers will get a refund from Metro Bank after it failed to tell them about unarranged overdraft charges.
Since 2018, all banks have been required to send text messages to customers when they go overdrawn to help them avoid paying unnecessary charges.
Between February 2018 and December 2019, Metro Bank texted customers who fell into their overdraft but did not mention the charges, the Competitions and Market Authority (CMA) found.
Some of the alerts were also sent later than they should have been.
Customers were charged £10 for each payment that took them into an unarranged overdraft, with a maximum of £60 being charged in any month.
Metro Bank will repay a total of £11.4 million to affected customers. This includes £10.5 million for the charges plus 8% interest. The average payment will be around £86.
David Thomasson, chief commercial officer at Metro Bank, says: “We are very sorry that we didn’t include all the information we should have done on our overdraft text alerts, and that on certain occasions some customers did not receive these alerts before 10am as they should have done.
“This isn't the level of service that we pride ourselves on providing and we are now contacting any customers who have been impacted to put things right for them as quickly as possible.”
Several banks have been found to breach overdraft rules and just last year, HSBC and Santander were ordered to refund customers.
How will you be refunded?
Affected customers will be sent a letter or email from Metro Bank detailing how much they will be refunded. Payments will be made by summer 2020.
If you think you may have been affected but have not received any correspondence by 30 June, you can contact the bank directly using this online form.
Beware scams
Metro Bank has warned customers to be wary of scams. If someone contacts you claiming to be from Metro Bank or another organisation and asks for your bank details to send you a refund, it is a scam.
Hang up immediately or do not reply to any correspondence asking for those details.
Metro Bank is asking for customers to report suspicious calls or emails straight away to 0345 08 08 500.
This article was first written by our sister magazine Moneywise.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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