130,000 Metro Bank customers to get overdraft refunds

Since February 2018, current account providers have had to send customers a text alert warning them about the fees before they charge them for using their unarranged overdrafts. This gives customers a chance to take action and avoid any charges.

But between February 2018 and December 2019, Metro Bank sent customers text alerts which didn't inform customers that they would be charged – with some of these alerts also sent later than they should have been.

Those who then went into their unarranged overdrafts were charged £10 for each payment which took them into their overdraft or was refused due to lack of funds, with these fees capped at £60/month (Metro Bank removed unarranged overdraft charges altogether in December 2019, and now charges a flat rate of 34% for both arranged and unarranged overdrafts).

After reporting the breach to competitions watchdog the Competition and Markets Authority (CMA), Metro Bank will pay back £10.5 million in unarranged overdraft charges to 130,000 affected customers.

It has also agreed to pay interest at 8% on top of this, meaning it will pay out £11.4 million in total. This means an average payment of about £86 each for affected customers, though actual payments could be higher or lower than this.

Metro Bank isn't the first provider to be rapped by the CMA for breaking the rules about overdraft warnings, with Nationwide, HSBC and Santander all refunding customers over the last year.

See our Cut Overdraft Costs guide for more info on managing overdrafts.

I'm a Metro Bank customer – what should I do?

Metro Bank says affected customers don't need to do anything, as it's proactively identifying all the accounts in question.

If you're affected, you'll be sent an email or letter about your refund, and will receive your payment by summer 2020.

But if you think you're affected and haven't heard anything by 30 June 2020, you can get in touch directly via its contact form.

You can also use this form if you've incurred extra costs as a result of not receiving the right alert – for example, if the unarranged overdraft charge caused you to miss other payments. Metro Bank says it will consider all "reasonable claims" for extra costs.

Metro Bank has warned that if you're contacted by an organisation claiming to be the bank and asking for account details in order to process your refund, it's a scam. If this happens to you, you should report this to it straightaway by calling 0345 08 08 500.

What does Metro Bank say?

David Thomasson, chief commercial officer at Metro Bank, said: "We are very sorry that we didn't include all the information we should have done on our overdraft text alerts, and that on certain occasions some customers did not receive these alerts before 10am as they should have done.

"This isn't the level of service that we pride ourselves on providing and we are now contacting any customers who have been impacted to put things right for them as quickly as possible."