NatWest is refunding £600,000 to more than 700 small and medium-sized businesses after it broke competition rules by forcing them to open fee-paying accounts to take out loans with the taxpayer-backed bank.
The Competition and Markets Authority said it was unacceptable that NatWest had compelled small business customers that were applying for loans to open the expensive accounts instead of allowing them to have fee-free feeder accounts.
The Competition and Markets Authority (CMA) said the practice, known as ‘bundling’, breached its rules over a three-year period. The bank will now issue a total of £600,000 in refunds.
Companies were pushed into opening a business current account, which incurs fees, in order to secure a loan. As such, “hundreds of businesses” have been charged monthly for a business account that they may not have wanted or needed, the CMA said.
The CMA said the bank “should have known better” as a total of 956 NatWest customers were affected, with 702 set to receive refunds.
NatWest is now set to write to all affected SME customers with a business account to offer them the option of switching 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.
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