Not upheld: unfair variation of contract terms and introduction of fees complaint against Santander UK Plc

Decision detail

Summary

M, a limited company, complained that Santander breached a commitment to provide free business banking forever by introducing a £9.99 monthly fee and migrating the account to a new Classic Account in 2025. Although Santander had marketed the account as fee-free when opened in 2011, the ombudsman found that the contractual terms and conditions have always permitted the bank to vary fees and convert accounts with appropriate notice. The ombudsman considered it fair for Santander to introduce fees given substantially increased costs, regulatory changes, and the need to ensure equitable distribution of fees across its customer base. The ombudsman noted that Santander provided the required notice and that M retained the option to switch providers. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Santander had marketed the account as fee-free forever, the contractual terms and conditions (which form the binding agreement) have always permitted the bank to vary fees and convert accounts with appropriate notice. The ombudsman considered it fair for Santander to introduce fees given substantially increased costs over the years, regulatory changes, and the need to ensure equitable distribution of fees across the customer base. The ombudsman noted that even the original 2011 terms contained variation clauses, and that marketing materials from the 2000s included caveats about potential variation. Santander provided the required notice and M retained the option to switch providers.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website