Not upheld: unfair contract variation and removal of promised benefit complaint against Santander UK Plc

Decision detail

Summary

R, a limited company, complained that Santander unfairly migrated its business account from fee-free to a £9.99 monthly fee account in 2025, despite the account being marketed as 'free banking forever' when opened in 2006. R argued it was not provided with terms and conditions allowing such changes and that the promise of lifetime free banking should be binding. Santander argued the terms and conditions from opening contained variation clauses, the account had been migrated in 2015 to terms explicitly allowing fee changes, and that as a commercial decision to standardise fees was justified by regulatory and cost changes. The ombudsman found Santander entitled to rely on the variation clauses in the terms and conditions, which had been consistent for over 20 years, and that adequate notice had been provided for the migration.

The Ombudsman's reasoning

The ombudsman found that while the account was marketed as 'free banking forever', the terms and conditions applicable from account opening contained clear variation clauses allowing Santander to make changes with notice. The ombudsman was satisfied on balance of probabilities that R likely received the terms and conditions at opening. The 2015 migration to the 'Everyday Current Account' meant Santander's general terms applied, which explicitly allowed for changes including fees based on cost and regulatory changes. The ombudsman concluded that as a commercial business, Santander is entitled to withdraw uneconomic products and that the 60+ days notice provided met contractual requirements. The ombudsman noted that free business banking is not typical in the market and that Santander's decision to standardise fees across customers was a legitimate commercial decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website