HSBC rapped by Competition Authority for SME lending breach

HSBC ATM

The competition watchdog said HSBC had forced some small businesses to open an account with the bank to obtain a loan, breaking commitments made by banks to end the practice.

The Competition and Markets Authority said on that HSBC had to immediately correct the practice and make it clear to staff and SME customers that obtaining a business loan is not dependent upon opening an account.

British banks said in 2002 they would stop the practice – known as ‘bundling’ – to safeguard customer choice, the CMA said.

“We regret that the bank has not been fully compliant with ‘bundling’ undertakings,” a spokesman for HSBC said, adding the bank was working with the CMA to fully comply with the requirements.

The CMA plans shortly to start an investigation into Britain’s SME banking markets.

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