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HSBC To Refund UAE, Oman, Bahrain Customers For Excessive Fees

HSBC To Refund UAE, Oman, Bahrain Customers For Excessive Fees

The lender said it charged them excessive foreign currency fees on debit and credit card transactions.

HSBC will refund customers across five countries in the Middle East and North Africa for charging them excessive foreign currency fees on debit and credit card transactions, the lender confirmed to Reuters on Wednesday.

The step was taken after an internal review of the bank’s terms and conditions for those products, a spokeswoman for the bank said without elaborating.

How much banks charge customers in fees has come under scrutiny recently as consumers and regulators put lenders under pressure to operate with more transparency.

HSBC would refund amounts charged in excess of the costs set out in the lender’s terms and conditions, according to an email it sent to customers.

“We found we could have better explained how we charged fees for foreign currency transactions, especially if more than one fee was applicable,” the spokeswoman said.

“HSBC believed the right thing to do was to refund customers any amount that was not entirely clear in the terms and conditions.”

HSBC’s actions affected customers in the United Arab Emirates, Egypt, Oman, Bahrain and Lebanon, the spokeswoman said, declining to say how much it was refunding or how many customers were affected.

Many banks in the region have fallen back on fees and charges as a way of offsetting pressure on the profitability of lending, which has been squeezed by intense competition in retail banking.

HSBC Middle East posted a 9.2 per cent rise in net fee income to $289.7 million in the half year to June 30, while profit attributable to shareholders of the parent company rose 4.4 per cent to $467.4 million over the same time period, its financial statement showed.

One customer told Reuters they had been informed by email that they would receive more than Dhs3,000 ($817) in refunds dating back several years. Other customers were notified they would receive smaller amounts.

Banks have been battling against a rising number of non-bank money transfer providers, which often promise currency exchanges at cheaper rates to banks.

TransferWise, a UK-based transfer provider, has helped organise an online petition – so far signed by more than 17,000 consumers – calling for British regulators to force banks to tell consumers how much they make on everyday foreign currency transactions.

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