The Competition and Markets Authority (CMA) has told Barclays to improve its practices after the bank broke rules designed to protect small businesses by requiring some to open bank accounts they did not request or need, in a process known as ‘bundling’, reports Accountancy Daily.
The legal undertakings, which were signed up to by Barclays and other banks in 2002, include a ban on banks insisting that businesses open or maintain current accounts before they are able to access other products.
Barclays breached the undertakings by preventing SMEs who had business premium accounts from transferring money to or from non-Barclays accounts, and telling holders of notice deposit accounts that they had to open a current account at Barclays.
The bank’s actions led to unnecessary costs to some SMEs who were made to hold accounts they did not need.
The CMA has now issued directions to Barclays, requiring the bank to stop bundling products together in this way, and ensuring it puts measures in place to prevent any recurrence.
Since first reporting the issue to the CMA, Barclays has taken steps to fix the problem, including allowing affected customers to transfer funds to and from other banks, and by changing their terms and conditions so that businesses who want to open notice deposit accounts are no longer told they have to hold a Barclays current account.
The bank will also pay nearly £2000 in total compensation across affected business premium account holders to reimburse them for payments they should not have had to make.
Adam Land, CMA senior director, said: ‘The undertakings are clear that banks must not force small businesses to have current accounts with them, as part of a practice known as bundling. Bundling prevents small firms from being able to choose the best banking products for them and can result in unnecessary costs.
‘The CMA directs Barclays to write to all affected customers explaining that they don’t need to hold a Barclays current account, appoint an independent body to audit Barclays’ compliance with the undertakings and provide the independent body’s report to the CMA.’