Nationwide are set to refund £6m to thousands of its customers due to the building society’s failure to send the relevant text warnings.
The building society was supposed to send text alerts whenever a customer was on the verge of incurring banking fees by entering an unarranged overdraft.
It is estimated that some 320,000 customers are now due a refund for the fees they were charged as a result of the mishap.
The Competitions and Markets Authority (CMA) have concluded that Nationwide had broken rules regarding alerting customers by text several times in the past year. The CMA cited 20 separate incidents since February 2018.
The text warnings are in place so that customers can take the necessary precautions to avoid being charged fees for entering an unarranged overdraft. In many instances, the building society did not clarify to their customers via text that they would be incurring a fee if they failed to take action.
Adam Land of the CMA said: “Nationwide failed to do this on numerous occasions and our action today makes it clear they must fix this as a matter of urgency. It is imperative that these problems are sorted out immediately and that they don’t occur again.”
The CMA itself cannot take action against a company if it finds them to be in breach of the rules, but they are appealing to the government to extend the scope of their powers so that they may issue fines to outfits they deem to have engaged in malpractice.
Nationwide apologised, claiming that the wording of texts had been amended back in November 2018, and that they now had mechanisms in place to avoid such a thing happening again in the future.
In a separate and unrelated technical error, Nationwide customers seemed to be double charged for some of their payments – resulting in their bank balances appearing to be lower than they actually were. This was caused by one payment being marked as completed, and another identical payment being flagged on their account as a pending transaction.
Nationwide customers took to social media to vent their frustration over the blunders – with some threatening to take their business elsewhere as a result.
Some customers complained that they appeared to have gone into overdraft despite not having an overdraft facility on their account. Others complained that they were distraught having been led to believe they had very little left in their account.
Iwan Edwards was left stumped for 12 hours as he was charged £12,543 twice as he tried to make payment for a new car. Clare Jones had a similar experience, trying to pay £2000 for a holiday and having £4000 taken out of her account instead.
A spokeswoman for Nationwide issued an apology to the thousands that were affected:
“Yesterday evening, we identified a problem that meant the available balance on some member accounts appeared lower than they should, due to some payments still showing as pending.
“This was corrected overnight and everything is now working normally. We apologise to those members affected and can assure them that they won’t incur any charges as a result of this issue.”