CMA directs Barclays to improve the way it treats small business
The CMA has directed Barclays to improve its practices after the bank broke rules designed to protect small businesses.
Britain’s competition watchdog has directed Barclays to improve the way it treats small business after Barclays told the CMA that it had not complied with aspects of legal undertakings designed to make it easier for businesses to shop around and choose the best accounts for them.
The 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.
As a result, the CMA has issued directions to Barclays, requiring them to stop bundling products together in this way, and ensuring they put measures in place so it doesn’t happen again.
"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," said Adam Land, CMA senior director.
"The directions issued today make clear Barclays must take immediate action to correct the problems they found and ensure they do not occur again.
"Small businesses should be confident that they can use loan and deposit account services at Barclays without being told that they are required to hold a business current account they don’t need," added Mr Land.
The CMA has directed 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.