Natwest has been ordered to provide refunds of up to £600,000 to business customers who were wrongfully forced to open current accounts, which incur fees, to secure a loan.
The move follows action by the Competition and Markets Authority (CMA) which found that Natwest had breached its banking rules. This breach lasted for more than three years up to January 2021, when the CMA became aware that the bank had signed certain customers up to a business account, when they had specifically requested to have a fee-free account.
SMEs to receive refunds
More than 700 small and medium-sized businesses are due to receive refunds, having been charged monthly for a business account that they may not have wanted or needed. Their choice was also limited as they were unable to hold an account with a separate provider, which may have better met their requirements.
Natwest will now write to all affected small and medium business customers and offer them the option to switch to a fee-free loan servicing account.
Adam Land, CMA senior director of remedies, said: “Forcing businesses to open costly current accounts to secure essential loans is unacceptable – and a direct breach of our rules, which have been in place for 20 years. NatWest should have known better. These rules are there for a reason: to make sure small businesses are treated fairly, and to make sure the market is competitive.”
