Barclays Canary Wharf

Whistle blower: Barclays reported itself to the CMA for breaking small business banking rules

Barclays has refunded small business clients an average of £2.50 each after it misled them into opening unnecessary current accounts to access other services such as loans.

About 800 affected Barclays small business clients shared the £2,000 compensation.

The financial services group reported pre-tax profits of £1.5bn in the first quarter.

Britain’s competition watchdog the Competition and Markets Authority has told Barclays to improve the way it treats small businesses. The rules, which Barclays signed up to in 2002, prevent banks from insisting that businesses open or maintain current accounts before they can access other products.

Barclays breached the rules by preventing small and medium-sized businesses that had premium accounts from transferring funds to or from accounts outside Barclays, and also by telling deposit account holders that they had to open a current account as well.

However, the Competition and Markets Authority is prevented from imposing fines for flouting rules.

“The bank’s actions led to unnecessary costs to some SMEs who were made to hold accounts they did not need,” the CMA said.

But it was Barclays itself that turned whistle blower, reporting its transgression to the CMA, and it has since moved to patch the problem, allowing affected customers to switch accounts.

“We’ve been working closely with the CMA and have corrected a mistake we made which affected a small number of business customers. We’ve taken steps to ensure that this does not happen again,” Barclays said.

Further reading

Q&A Ian Rand, CEO of Barclays Business Banking

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