Santander will be paying out £1.4 million in refunds to 20,000 of its customers as a result of an error in overdraft alerts.
Banks are required to notify their customers if they’ve slipped into their overdraft before they get charged.
However, Santander customers that opened either an Everyday Current Account or an Essential Current Account between the period of 1 February 2018 and 20 February 2019 were not enrolled onto the alerts system.
The fine for customers going into an unarranged overdraft is £6 per day.
Breach of Financial Conduct Authority
The failure to alert its customers before fining them means that Santander was found to have breached the Financial Conduct Authority (FCA).
Current FCA guidelines state that all banks must make customers aware that they’ve gone into an unarranged overdraft before billing them.
The Competitions and Marketing Authority (CMA) found Santander to be in breach of banking regulations.
Letter from the CMA
A spokesperson for Santander said, “We notified the Competition and Markets Authority (CMA) when we became aware of the issue and continue to keep the CMA updated on progress.
“We are sorry that some customers did not receive unarranged overdraft alerts and we are in the process of refunding customers who incurred unarranged overdraft charges as a result.”
In a letter to Santander, the CMA said, “We welcome Santander refunding around £1.4million of charges levied on customers who should have received an alert but did not, and who went on to receive charges for exceeding a pre-agreed credit limit."
I’m a Santander customer - am I owed money?
Santander ensures that customers affected by the error don’t need to do anything to claim their refund. The bank is identifying affected accounts and paying them back automatically.
If you had an account that was affected but has since been closed, Santander says that it will be in touch to arrange how you would like to be refunded.
If you have concerns about your account and whether or not you should be getting refunded, you can get in touch with the Santander complaints team on 0800 171 2171.
Measures to prevent it happening again?
In the letter from the CMA, they outlined how Santander has boundaries in place to prevent further breaches.
These measures included putting procedures in place to make sure that customers are being enrolled into the alerts programme, ensuring that existing customers are part of the alerts programme and introducing additional controls to ensure no further breaches.
This article originally appeared on our sister site Edinburgh Evening News