Not upheld: Account administration errors complaint against Santander UK Plc

Decision detail

Summary

Mr H complained that Santander unfairly migrated his business current account from fee-free banking to an account with a £9.99 monthly fee, despite the original marketing promising 'fee-free banking forever'. Although the Ombudsman acknowledged the marketing promise, it found that the contractual terms and conditions—which Mr H agreed to—consistently permitted Santander to make changes to the account. Santander provided more than the required 60 days' notice and offered Mr H alternatives including closing the account without penalty or switching providers. The Ombudsman accepted that significant regulatory changes since 2007 (anti-money laundering, counter-terrorism financing, fraud prevention) justified increased operational costs. The complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman distinguished between marketing material and contractual terms and conditions. While acknowledging the marketing promise of fee-free banking forever, the Ombudsman found that the binding contractual terms and conditions consistently permitted Santander to make changes to the account. The Ombudsman accepted that significant regulatory changes since 2007 (anti-money laundering, counter-terrorism financing, fraud prevention) justified increased costs. The Ombudsman concluded that Santander acted fairly by relying on contractual change clauses, providing adequate notice (exceeding the 60-day requirement), and offering Mr H reasonable alternatives including account closure without penalty or switching to another provider. The Ombudsman also noted that as a commercial business, Santander was entitled to withdraw uneconomic products.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website