Laura WilesCMA has published its annual report on compliance with the SME banking behavioural undertakings 2002, covering the period from 1 July 2021 to 30 June 2022. The report analyses how well 8 UK banks have complied with obligations restricting their ability to bundle certain products offered to SMEs.
One bank reported that 6 customers who had requested a fee-free Loan Servicing Account were given a BCA, which charges SMEs, instead. Refunds were provided to each customer, and due to the scale of the breach and this remedial action, CMA did not take public enforcement action.
The report also set out best practices in ensuring compliance with the undertakings where banks have fallen short. In particular, it concluded that banks should:
- Have in place policies, practices and procedures to:
- Monitor compliance with the undertakings; and
- Ensure internal communications support compliance with the undertakings, and that staff are informed of their responsibilities;
- Provide training to staff on how to comply with the undertakings and assess their understanding. CMA considers that all staff should be trained on their legal obligations, even if SMEs are not their main customers or they are new to the role;
- Review their lending appeals processes to check if potential customers have been refused loans or savings accounts because they were not offered a BCA;
- Review their own internal complaints; and
- Have an individual complaint code for the bundling of products.
CMA drew particular attention to the enhanced measures adopted by Clydesdale, which carries out training twice yearly.