The U.K.’s Competition and Markets Authority (CMA) is ordering Barclays to improve its treatment of small and medium-sized businesses (SMBs) after the financial institution reportedly admitted to initially failing to change practices to comply with CMA requirements.
Reuters reported late last week that the CMA found Barclays had violated rules designed to protect small businesses, specifically through its requirement that SMBs open current accounts with the bank to be able to access other products and services. Barclays said it has since made the necessary changes to remedy the issue, including changing its contractual terms with SMBs to allow businesses to more easily switch bank accounts and access competitive financial products and services.
“We’ve been working closely with the CMA and have corrected a mistake we made which affected a small number of business customers,” a Barclays spokesperson said, according to reports. “We’ve taken steps to ensure that this does not happen again.”
In addition to making the changes, the bank will reportedly pay about $2,515 in compensation to small businesses affected by the error.
Reports said the CMA is also requesting Barclays to appoint a third-party auditor to assess the bank’s current compliance with CMA rules designed to protect small businesses. Those rules target eight banks, including Barclays, AIB, Bank of Ireland, Clydesdale, HSBC, Lloyds, Danske Bank and RBS, which are prohibited from bundling products in order to make it easier for small businesses to switch service providers and access products from competing institutions, reports said.
In a statement, CMA Senior Director Adam Land said, “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.”
The CMA has not issued any fines against Barclays because, it said, current law does not give the watchdog the authority to do so.