Upheld: Account administration errors complaint against Santander UK PLC

Decision detail

Summary

Mr R, a sole trader, attempted to switch his business account from Santander to another provider after Santander introduced a monthly fee, despite previously stating business banking would be fee-free. Santander denied the switch request because its system recorded his account as a partnership while his new account was set up as a sole trader. Mr R claimed he had always traded as a sole trader and that Santander had erroneously changed the account designation in 2023 when he added his wife as practice manager. The ombudsman found that Santander's records were incomplete and inaccurate, with no evidence that Mr R had instructed Santander his business was a partnership, and that the account had been recorded as a sole trader prior to 2023. Although Santander's request for Mr R's tax return was reasonable, the ombudsman upheld the complaint and awarded £350 compensation for the distress and inconvenience caused by the forced manual account switch, with the award reduced to reflect Mr R's failure to provide the requested documentation.

The Ombudsman's reasoning

The ombudsman found that Santander's records were incomplete and inaccurate, particularly the missing pre-2023 statements and the incorrect company start date of 1901. The key issue was not what Santander's records showed, but whether those records accurately reflected Mr R's instructions. The ombudsman found no evidence that Mr R instructed Santander his business was a partnership, and Mr R's consistent testimony supported that he only added his wife in 2023. The letter from December 2022 addressed to Mr R personally with reference to self-certification tax affairs supported Mr R's position as a sole trader. While Santander's request for a tax return was reasonable and not a data protection breach, the ombudsman found Santander's declination of the switch was due to Santander's own error in recording the account structure. Mr R's failure to provide the tax return contributed to the issue but did not absolve Santander of liability, as he had already experienced distress and inconvenience from Santander's initial error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website