On 2 February 2018, a rule change required by the Competition and Markets Authority (CMA) as part of its Retail Banking Investigation came into force.
The new rule provides for an overdraft alert, which will be sent by text message or via a mobile banking app, which applies to all banks with more than 150,000 active current accounts. The system will apply to new customers from today and will roll out to all existing bank customers over the coming month.
The CMA states that RBS has indicated that, on occasion, alerts may be provided up to a day late to a limited number of its customers up until September 2018. In the event that the alert is sent late, the CMA has required the bank to either prevent a fee being charged or reimburse customers for any fee that is charged within this period.
Other measures that also come into force:
- the Business Current Account (BCA) opening procedure. All BCA providers with more than 20,000 active BCAs to adopt a standard information set, which is the standard information required by banks when deciding whether to approve an application to open a BCA. The banks have worked with UK Finance to develop and agree the standard information set, which will be made available on UK Finance’s website;
- new loan price and eligibility tools covering all unsecured loans and standard tariff unsecured overdrafts up to £25,000. The new tools complement the CMA’s requirement – from August 2017 – for all providers to small and medium sized businesses of unsecured loans and standard tariff unsecured overdrafts to publish the cost of these products, showing a representative annual percentage rate for loans and effective annual rate for overdrafts; and
- a transaction history remedy that applies to all personal current account (PCA) providers with more than 150,000 active PCAs and all BCA providers with more than 20,000 active BCAs. Banks can decide whether to provide customers their transaction history in paper of electronic format.
View New overdraft alerts as CMA banking rules come into force, 2 February 2018