Not upheld: Account closure without notice complaint against Santander UK Plc

Decision detail

Summary

Mr F complained that Santander unfairly reduced his corporate account overdraft limit from £25,000 to £13,200 and subsequently closed all his accounts. Santander made multiple errors in the process, including failing to implement the first reduction on the scheduled date and failing to close accounts on the specified date, which led Mr F to believe the closure decision had been reversed and to continue using the account. While the ombudsman acknowledged Santander's poor communication and service failures, it found that Santander acted fairly in exercising its contractual right to reduce the overdraft and close the accounts with proper notice. The ombudsman upheld Santander's offer of £500 compensation and £198 fee refund as fair and proportionate, rejecting Mr F's requests for additional compensation and refund of subsequent fees and charges.

The Ombudsman's reasoning

The ombudsman found that Santander was entitled to review and reduce the overdraft limit as this is a regulatory requirement and the account terms permitted such changes with notice. The decision to close the accounts was also within Santander's commercial discretion provided proper notice was given and the decision was made fairly. However, the ombudsman acknowledged that Santander's communication was poor, with multiple errors causing confusion to Mr F. The ombudsman rejected Mr F's request for refund of fees incurred after November 2024, noting that Mr F still benefited from continued use of the account and overdraft facility, albeit due to Santander's error. The ombudsman determined that Santander's offer of £500 compensation and £198 fee refund was fair and proportionate to the service failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website