Over 115,000 HSBC and Santander customers owed overdraft charge refunds

Why are the banks refunding customers?

Since February 2018, a legal order from the CMA has meant banks must alert customers who go into an unarranged overdraft before they're charged. This gives them the chance to pay into their account and avoid being hit with a fee.

But HSBC has broken this order twice, while Santander breached it six times.

HSBC's first breach was due to its 'unsociable hours' policy, which means it doesn't contact customers after 10.45pm. As a result, most customers who went into their unarranged overdraft after this time weren't alerted until the next day – when they'd already been charged.

Its second breach was due to its systems for storing some customers' phone numbers not being compatible with its text alerts system, meaning some customers weren't contacted.

Santander's six breaches included failing to put customers' mobile numbers onto its alerts system in some cases, not alerting some customers who went into unarranged overdrafts as a result of overnight direct debit payments, and not sending alerts until later than they should have.