Competition & Markets Authority
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£600,000 in refunds over NatWest ‘bundling’

Following CMA action, NatWest is set to refund hundreds of business customers after it wrongfully forced them to open current accounts to secure a loan, which cost money.

  • NatWest issued with legal directions by the CMA after it broke banking rules
  • Over 700 small and medium-sized businesses to receive refunds
  • Senior Director: “Forcing businesses to open costly current accounts to secure essential loans is unacceptable”

The Competition and Markets Authority (CMA) has found that NatWest breached CMA banking rules by forcing business customers to open a business current account, which incurs fees, in order to secure a loan – a practice known as ‘bundling’.

As such, 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 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.

Adam Land, CMA Senior Director of Remedies, said:

Forcing businesses to open costly current accounts to secure essential loans is unacceptable – and a direct breach of our rules, which have been in place for 20 years. NatWest should have known better. These rules are there for a reason: to make sure small businesses are treated fairly, and to make sure the market is competitive.

The CMA has now issued legal directions to NatWest, and the bank is in the process of refunding affected customers. NatWest will now write to all affected SME customers with a business account to offer them the option of switching to a fee-free loan servicing account.

The move comes as part of the CMA’s crackdown on breaches of its banking rules. Over the past 4 years, it has put a stop to bundling by HSBCDanske BankClydesdale Bank, and Lloyds, as well as securing millions in refunds in relation to overdraft charges: £17 million for Santander customers, £11 million for Metro Bank customers, £8 million for HSBC customers, and £7 million for Nationwide customers.

For more information, see the directions issued to NatWest by the CMA.

Notes to editors

  1. This update relates to breaches of the SME Banking Undertakings 2002
  2. 956 NatWest customers were affected, with 702 set to receive refunds
  3. The breach took place between 2017 and 2020
  4. The Retail Banking Market Investigation Order 2017 offers further protection to banking customers and has been enforced by the CMA for the last 5 years. During that time, the CMA has written publicly to banks 22 times and issued 4 sets of legally-binding directions – all to help banking consumers receive correct and accurate information. To date, customers have received more than £47m in refunds
  5. All enquiries from journalists should be directed to the CMA press office by email on or by phone on 020 3738 6460
  6. All enquiries from the general public should be directed to the CMA’s General Enquiries team on or 020 3738 6000
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