The Competition and Markets Authority (CMA) has criticized HSBC, Nationwide, and TSB for “significant failures” in reporting transaction histories for both personal and business customers switching banks.
According to the Retail Banking Order, banks are required to provide small and medium-sized enterprises (SMEs) with a complete payments transaction history when they switch accounts, specifically for those with a turnover of less than £6.5 million. These requirements also apply to retail customers.
For SMEs, access to transaction history is crucial when seeking new credit. The CMA’s most severe criticism was directed at HSBC, which failed to deliver approximately 12,200 payment transaction histories to former business account holders. The CMA labeled this oversight as “unacceptable.”
The CMA stated, “It is unacceptable for a large, regulated entity like HSBC to fail to establish an effective process ensuring that business current account customers who close their accounts receive their Payment Transaction History in line with legally binding obligations.” This failure resulted in breaches that persisted since the Order was enacted. HSBC’s processes, systems, and staff were unable to detect and report these breaches until December 2022. Additionally, the bank’s inability to assess the extent of these breaches due to inadequate systems is further concerning.
TSB also faced similar criticism for failing to send over 105,000 payment transaction histories to former business and personal account customers. Nationwide neglected to provide this information to approximately 51,000 former personal current account holders from when the rule was implemented until May of this year.
Despite these shortcomings, the CMA has opted not to impose penalties on the banks, which have since taken steps to ensure compliance with the regulations.