Not upheld: unfair account terms changes; withdrawal of free banking product complaint against Santander UK Plc

Decision detail

Summary

L, a limited company, complained that Santander unfairly migrated its business account from a fee-free product to one charging £9.99 monthly, despite being promised 'free banking forever' when opening the account in 2007. Santander acknowledged the marketing promise but argued the contractual terms and conditions allowed for changes with notice, which it provided. The ombudsman found that the terms and conditions, not the marketing literature, defined the contractual obligations, and that Santander was entitled to make the change given regulatory developments since 2007 and the commercial non-viability of free business banking. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the marketing literature promised 'free banking forever', the contractual terms and conditions have consistently allowed Santander to make changes to the account by providing notice. The terms and conditions are the binding contractual obligations, not the marketing literature. Santander provided more than the required 60 days' notice. Significant changes in banking regulation since 2007 have increased compliance costs. Free business banking is not a typical market offering, and Santander is entitled as a commercial business to withdraw uneconomic products. The KYC requests were legitimate regulatory obligations and did not constitute harassment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website