MSE News: Santander to charge for 'free' business accounts

007Mole

I have read the posts with interest. For those who seem to support the actions of Santander, I would point out that we do not really get free banking anyway. Our banking is paid for by, for example, the difference in interest that we receive and that the banks receive, the interest paid on monies that are in clearing, etc. Furthermore, regardless of how well a business is doing, why would I want to pay for something that I need not pay for (particularly when I signed up for a free service). That is simply not good business.

Notwithstanding this, there was a clear declaration that this would be 'free forever' and, regardless of some measly worded getout clause, I feel very strongly that the actions of Santander are outrageous. Quite frankly, I do not have the time or inclination to start making complaints. However, as
I am already a member of the FSB, I will simply be changing my account to the Cooperative ASAP.

Big_Ash

Oh dear. First the One Account - is it a tracker or isn't it? Now this.

I opened my account two years ago under the Santander brand with the promise of free banking...not for 12 months, not 18 months but forever. Their emphasis not mine....

Their account opening process was a joke and took over three months. They insisted on my 25% shareholder in signing an acceptance form even though their form said this was only necessary for shareholders with over a 25% percent stake. I prefer banks that understand percentages and logic but accepted all this as being a cheap and cheerful product.

But reading about this has really angered me. This is just pure corporate greed. To those that claim bank fees are tax deductible, yes they are. But only the tax. The remaining 80% comes out of my bottom line. I am not a banking charity.

I have less than 12 transactions per month and an average balance of 30k. They make more than enough money out of me through credit creation and have absolutely no reason to charge me. Oh hang on, they don't want to lend to anyone do they. The banks really are broke.

Glad I kept that BoS business account open "just in case"....

bordercars

if im going to pay, then it will at the very least be to a British bank.

now then wheres my nearest Co-Op branch.

rrobbo

squowse wrote: »

Or you could take the money out (Director's Loan Account) and invest it where you like. I think you could easily beat 2%.

I think that this has the potential to be judged as a benefit in kind (if over £5k) and be taxed accordingly and presumably you'd pay your marginal rate of tax on the interest you earned personally. My accountant had always erred away from director loans although I agree with the general premise that personal savings accounts do pay far better than business ones.

The one positive thing that may come out of these charges is that it may be the catalyst to get businesses to review their banking situation and possibly reduce/contain their costs and increase their income. Any options such as using Director's Loans may be of interest to many people who might not be aware of them

bmtney54

I've just been made aware of this, although not yet had my 'letter' from Santander. Certainly we should ALL complain and if necessary take the matter to the FSO when Santander blank the complaints.

In the interim those of us with FREE banking (no charge per cheque written - get my drift...) should maybe all begin to take a little revenge on the bank. If there are 230,000 or so of us affected by this, and say 100,000 do THIS, maybe they will listen. Cheques are becoming less and less used - right, WRONG. Not Santander cheques. Write say 10 (or maybe 20) cheques to your private bank account for say 10p each. These have to be processed (we're told at £1 each). So if enough of us do this by my reckoning, they might just sit up and take note.

Action speaks louder than words......

BusinessIsBusiness

psdie wrote: »

Another SME Abbey customer here, signed up in 2006 on the promise of "free banking forever", disgusted to see Santander breaking both that promise and their promise that nothing would change for Abbey customers when they took over.
I notice everyone is talking about £7.50pm - in fact it's likely to be higher for most businesses, as that only "entitles" you to deposit £1k/month - I'm quite sure even micro businesses turn over more than £12k/year! Seems misleading to me that Santander claim "most" businesses will pay the £7.50 rate - but no surprise there.
So in fact most are more likely to be paying £12.50pm (£150/year), which is the next available tier. The exception would be if your turnover is < £24k/year, in which case it's slightly cheaper to pay £7.50pm plus 50p per £100 of income over £12k - e.g., £18k = £10pm.

Little_Miss_Moneysaver wrote: »

Hi,
I agree with someone else's post also - the £7.50 is only going to be applicable to companies with a very small turnover. The rest of us will be paying much much more - £20 to £40 per month in bank charges.
I never did understand why business banking had charges but basic personal accounts didn't have them.
My business does about £220k turnover, depositing about £3-4k cash per month, majority by bacs payment from the credit card machine provider, and a few cheques.
Some would argue that a "small charge" of £20-40 isn't going to cripple my business, however I would strongly argue back that it's by watching the pennies, and being as careful as possible with overheads that my business has reasonable cash stores in the bank. It's also the reason i can charge a lot less than the competition, to my customers - and they win as a result of it also. And it's the principle of the whole thing - i was sold a product with the T&C of "free forever"...
As for alternatives, the Abbey account we all had was a gem. I will look into the Co-op and HSBC one.
I also read up on the ING Direct Business Savings Account - has anyone else tried it? New product, only a couple of months old. I think only 10 cheques a month allowed, no cash deposits, and unlimited bacs transfers (don't quote me on that - i read up on it last week and relying on memory). The only problem with it is that it requires a linked account - i.e. santander to operate it, so the problem with the monthly charges still remain. So, i may move all my credit balances £££ out of santander (which gives me hardly any interest) to ING - just a bit of healthy revenge on santander...

You are wrong in how the account works. The bank is not trying to ‘catch you out’ or lie. Cash means coins and notes... so the 12k you are referring to is the amount of actual 'physical' cash you can deposit before incurring the extra 50p per £100. So all of your other standard transactions are free and unlimited- so bacs SO’s etc... Thought it is important to state that before this gets people worried. So in fact most businesses with a turnover below 250k wouldn’t need to pay more than the 7.50- the exceptions being retail shops and other cash based businesses who would opt (or get dragged) to the 20 or 40 accounts etc.

It’s easy to be driven by emotion but the hard facts are the account was free in a market that doesn’t offer free business banking. They were able to change the conditions and they did. The Co-op and HSBC have been bandied about but they aren’t just free, there are still hurdles, hoops and technicalities. The bank has decided that it wants to bring what it offers in line with the market, but is still competitive. Also they have increased Business Managers from 50 to over 200 and more in the future, across the UK. Someone has to pay for that.

To take ‘revenge’ or spending an hour writing loads of small free cheques really isn’t worth your time. The bank won’t care. If you are peeved off and can find better- switch. That’s what a market is for- you should all just hurt the bottom line if you don’t like it and want to make a point.

The fact is they are able to change the terms and they did... very weak and slimey!!

I suppose they should have said free forever... for a bit.

Paulgonnabedebtfree

For a reasonable service, I would actually be prepared to pay more than £7.50 a month - but not to half brained idiots like Santander.

Victor_Mildrew

Paulgonnabedebtfree wrote: »

For a reasonable service, I would actually be prepared to pay more than £7.50 a month - but not to half brained idiots like Santander.

Here here.
But i'm going to give them "Hell" before I leave.

Complaint letters to everywhere & lots of 1p cheques( must remember to order lots of cheque books).
Nobody likes Liars! Which is what they are!!

Paulgonnabedebtfree

Victor_Mildrew wrote: »

Here here.
But i'm going to give them "Hell" before I leave.

Complaint letters to everywhere & lots of 1p cheques( must remember to order lots of cheque books).
Nobody likes Liars! Which is what they are!!

I think Santander have one foot in the grave anyway
All together now,
"I don't believe it!!"

nchuckle

Some very useful comments & suggestions (especially legal interpretations) from many above.Maybe someone will make a legal challenge but the best suggestion made so far (thanks robind) I think is in the meantime for all/many of us to simply swamp their complaints /escaltions dept so that the expense/time & adverse publicity may convince them that it will cost them more than the money they make from the charges.Once (if)it finally goes ahead I will simply close the account & move my personal/savings account with it.Apathy will be Santander's weapon,don't let it happen!