Not upheld: contract variation and unfair account migration complaint against Santander UK Plc

Decision detail

Summary

R, a company that opened a business current account in 2004 marketed as offering free banking forever, complained that Santander wrongly gave notice in July 2025 of migration to a new account with a £9.99 monthly fee. R argued this breached a contractual obligation to provide free banking forever and that the 2015 migration letter confirmed no changes to rights or tariffs. The ombudsman found that the account's terms and conditions from inception contained explicit provisions allowing Santander to vary the contract and fees, and these provisions remained unchanged through all subsequent versions. Although the account was marketed as free, the contractual terms took precedence, and Santander provided more than the required 60 days' notice. The ombudsman concluded it was fair and reasonable for Santander to migrate customers to fee-paying accounts as free business banking is not a typical offering and Santander is entitled to withdraw uneconomical products.

The Ombudsman's reasoning

The ombudsman concluded that the terms and conditions applicable to R's account from inception contained clear provisions allowing Santander to vary the contract and fees, subject to providing notice. Although the account was marketed as offering free banking forever, the contractual terms and conditions take precedence and explicitly permit changes. The 2015 letter stating that rights and tariffs had not changed did not negate Santander's continuing right to vary the contract under the terms and conditions. Santander provided more than the required 60 days' notice. The ombudsman found it fair and reasonable for Santander to make these changes as free business banking is not a typical offering, and Santander is entitled as a commercial business to withdraw uneconomical products.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website