Competition & Markets Authority
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CMA directs Barclays to fix banned banking practices

The CMA has directed Barclays to improve its practices after the bank broke rules designed to protect small businesses.

The move comes after Barclays told the CMA that it had not complied with aspects of legal undertakings designed to make it easier for businesses to shop around and choose the best accounts for them. The undertakings, which were signed up to by Barclays and other banks in 2002, include a ban on banks insisting that businesses open or maintain current accounts before they are able to access other products.

Barclays breached the undertakings by preventing Small to Medium Enterprises (SMEs) who had Business Premium Accounts from transferring money to or from non-Barclays accounts, and telling holders of Notice Deposit Accounts that they had to open a current account at Barclays. The bank’s actions led to unnecessary costs to some SMEs who were made to hold accounts they did not need.

The CMA has now issued Directions to Barclays, requiring them to stop bundling products together in this way, and ensuring they put measures in place so it doesn’t happen again.

Since first reporting the issue to the CMA, Barclays has taken steps to fix the problem, including allowing affected customers to transfer funds to and from other banks, and by changing their terms and conditions so that businesses who want to open Notice Deposit Accounts are no longer told they have to hold a Barclays current account. The bank will also pay over £2000 in total compensation across affected Business Premium Account holders to reimburse them for payments they should not have had to make.

Adam Land, CMA Senior Director, yesterday said:

The Undertakings are clear that banks must not force small businesses to have current accounts with them, as part of a practice known as bundling. Bundling prevents small firms from being able to choose the best banking products for them and can result in unnecessary costs.

The Directions issued today make clear Barclays must take immediate action to correct the problems they found and ensure they do not occur again.

Small businesses should be confident that they can use loan and deposit account services at Barclays without being told that they are required to hold a business current account they don’t need.

The CMA directs Barclays to write to all affected customers explaining that they don’t need to hold a Barclays current account, appoint an independent body to audit Barclays’ compliance with the Undertakings and provide the independent body’s report to the CMA.

Notes to editors

  1. The SME Banking Undertakings came into force in 2002. They were signed by the UK’s longer-established banks and limit bundling while also providing clear pricing information and faster methods of switching. Banks are generally improving their procedures to monitor and promote compliance with the SME Banking Undertakings, as illustrated in the 2018 Report on SME Banking Compliance, an annual report published yesterday on whether leading banks are complying with the rules.
  2. The following eight banks are currently subject to the bundling prohibition: AIB Group (UK) plc (known as First Trust Bank); Bank of Ireland; Barclays Bank plc (Barclays); Clydesdale Bank plc (Clydesdale), HSBC Bank plc (HSBC), Lloyds TSB Bank plc (now part of Lloyds Banking Group), Northern Bank Limited (now known as Danske Bank) and the Royal Bank of Scotland Group (RBS) which includes Ulster Bank Limited (Ulster Bank) in Northern Ireland. Whereas nine banks originally agreed to the behavioural undertakings, two of these banks, HBOS Plc and Lloyds TSB Bank plc, subsequently merged to become Lloyds Banking Group.
  3. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the CC and the competition and certain consumer functions of the OFT, pursuant to the Enterprise and Regulatory Reform Act 2013.
  4. At present, the law prevents the CMA from imposing fines for breaches of either Orders or undertakings. This limits the CMA’s ability to ensure these breaches do not recur. However, Andrew Tyrie, Chair of the CMA, requested these powers to ensure proper deterrence as part of a package of wider reforms to the CMA’s powers in a letter to Secretary of State for Business, Energy and Industrial Strategy Greg Clark in February.
  5. All media enquiries should be directed to the CMA press office by email on, or by phone on 020 3738 6460.


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