HSBC and Santander are to refund millions of pounds to customers for failing to alert hundreds of thousands of account holders that they had gone into an unauthorised overdraft.

HSBC is to pay back £8m to 115,000 customers after failing to follow banking rules that require a text alert to be sent to warn them they have gone into the red without authorisation. The text alerts are designed to give customers time to move funds and avoid a bank charge.

The Competition and Markets Authority said HSBC had broken the legal order twice regarding the requirement to send text alerts.

HSBC has said the technical issue relating to one of the breaches would not be fully fixed until June next year. Until that time customers will keep getting charged for unauthorised overdrafts, despite not getting the legally required alert first, but HSBC has committed to “refunding charges incurred on an ongoing basis so affected customers will not be worse off”.

“The CMA notes though that confirmation of the size and scale for both breaches will not be available until August 2020,” the CMA said.

HSBC said: “We apologise to those customers who for different reasons did not receive an alert. We will continue contacting customers who incurred overdraft charges as a result of these issues to apologise and provide a refund.”

Santander broke the same legal order six times but has so far been unable to provide the CMA with details on how many customers have been affected and how much it will refund.

The CMA was critical of Santander’s inability to do so and of the bank’s ongoing “insufficient attention” to compliance with the legal order since it was implemented in February last year.

“We note that, given the size of Santander and the number of customers it has, these breaches are clearly significant and a cause for concern for the CMA,” the regulator said.

“Even where examined purely on the basis of the duration of these breaches, they represent a concern, as they have been ongoing since the order came into force, demonstrating both insufficient attention having been paid by Santander to the implementation of, and also to the ongoing compliance, with this order.”

Santander apologised to customers and said it had fixed the problem with its alert notification system.

“We are very sorry that some customers in certain circumstances were not sent the required overdraft alerts,” he said. “The introduction of these alerts is a move we welcomed and believe is a real support to customers. We have carried out a detailed review to understand why the errors happened and have taken steps to fix the issues. We are now working to identify and refund all affected customers as quickly as possible.”

This is the second time Santander has broken the text ruling – in May, the bank said it would refund about £1.4m in overdraft fees relating to 20,000 current account customers. Subsequently the CMA found that 25,000 customers had been affected and that charges were £2m.

In August, Nationwide agreed to refund £6m to more than 320,000 customers with current accounts for failing to alert them prior to their being charged for unauthorised overdrafts.