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Nationwide commits £6M to refund clients impacted by breaches of overdraft rules

Nationwide Building Society agreed to reimburse current account customers affected by its repeated breaches of rules on overdraft fees to the tune of £6 million, the U.K.'s Competition and Markets Authority said Aug. 8.

The rules require banks to inform customers via text alerts before charging fees for unarranged overdrafts so they have time to act if they wish to avoid them.

The lender admitted that it failed to comply with the regulatory order 20 times and has impacted more than 320,000 clients. Some of its infractions took place as far back as February 2018, when the rules took effect, the regulator noted.

The CMA ordered Nationwide to improve its practices and compliance with the overdraft rules and for an independent body to audit any new processes introduced by the company.

Adam Land, the CMA's senior director for remedies, business and financial analysis, said the regulator "needs stronger powers for cases like this, which is why we are seeking the ability to impose fines when firms breach our orders."