British multinational investment bank HSBC has been found guilty of breaching banking rules over a period of nine years after it told small firms they were required to have a business current account in order to access loans.
The Competition and Markets Authority (CMA) said more than 200 of the bank’s customers that were small businesses had been misled, restricting their access to credit in violation of the country´s competition laws.
The move, also known as “bundling”, affected a total of 204 firms relating to 210 loans worth more than £800,000 ($1.05m). The policy, blamed on an error on HSBC’s part, mainly affected the bank’s Scotland-based customers and may also have prevented many from switching to another bank.
The lender reported the breaches to the competition watchdog itself and confirmed it ended them from September last year. They took place between 2002 and 2021.
HSBC wrote to affected customers to waive the non-compliance clauses from the relevant loan agreements, and has also offered refunds of all the current account fees and charges, it said.
The bank has also made clear that customers do not need to keep the accounts with HSBC to have a loan with them. The CMA’s suite of remedies will include increased training for HSBC staff in order to prevent such incidents in the future.
The UK has pushed to ease the process of switching banks since 2013 in order to increase competition in the banking sector, which is dominated by a handful of large banks.
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