Nationwide will give its customers a £6m refund after it was found to have broken legal orders relating to unarranged overdraft text alerts.
The Competition and Markets Authority (CMA) announced on Thursday that the building society had broken part of its retail banking market investigation, which ensures customers with personal current accounts receive a text alert before banks charge them for unarranged overdrafts.
The Government body said Nationwide admitted breaking the order 20 times, which affected 320,000 customers, with some of those dating as far back as February 2018.
That's the date the order, aimed at giving customers time to take action to avoid unexpected changes, was introduced.
Adam Land, CMA Senior Director for Remedies, Business and Financial Analysis, said:"The text alerts we ordered banks to send to customers if they are about to slip into an unarranged overdraft are key to helping them avoid unexpected fees.
"Nationwide failed to do this on numerous occasions and our action today makes it clear they must fix this as a matter of urgency.
"It’s imperative that these problems are sorted out immediately and that they don’t occur again.
"Although we are pleased that Nationwide is going to reimburse customers affected, the CMA needs stronger powers for cases like this which is why we are seeking the ability to impose fines when firms breach our Orders."
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The it has directed Nationwide to take immediate action and improve its practices and compliance with the Order. Any new processes must be audited by an independent body.
It also said it would publish a letter on Thursday to Nationwide about a breach of the Northern Ireland Personal Current Account Banking Market Investigation Order 2008.
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A CMA spokesperson explained: "Nationwide informed the CMA in June 2019 that, between June 2018 and June 2019, it had failed to provide leaflets on switching Personal Current Accounts to around 120,000 customers in breach of that Order. Although the Order was revoked before the CMA was notified of the breach, Nationwide has committed to provide affected customers with those leaflets."