More than 200 of HSBC’s small company customers were wrongly told they had to take out a business current account to be able to access a loan, the UK competition watchdog has revealed.
The Competition and Markets Authority (CMA) found that HSBC breached banking rules over a nine-year period by telling small firms it was a lending requirement to have a business current account.
The move – dubbed “bundling” – impacted 204 customers relating to 210 loans worth more than £800,000.
HSBC reported the breaches – which took place between 2002 and 2021 – itself to the CMA and confirmed it ended them from September last year.
It wrote to impacted 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, while making it clear they do not need to keep the accounts with HSBC to have a loan with the lender.
The CMA has now imposed legally binding directions on HSBC ensuring it takes action to ensure the breaches do not happen again, including improved staff training.
Adam Land, senior director at the CMA, said: “The rules are clear – banks should not ask customers to open or retain business accounts in order to have a loan with them.
“It is right that HSBC have offered refunds and we will monitor compliance with our directions closely to ensure this doesn’t happen again.”
HSBC was not immediately available to comment.
HSBC has been among a raft of banks that have in the past faced action from the competition regulator for the practice of bundling in small business banking.
There was also recently similar breaches in relation to bounce back loans, with the CMA forced to write to Danske Bank over bundling practices being used in its lending under the Covid support scheme, which impacted more than 300 of its small business customers.