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

janusdesign

magpiecottage wrote: »

They have forced businesses to honour commitments before now.

at which point, surely they would just appeal to a higher court?

i'm all for people having a crack at this, but I suspect it to be a futile gesture.

morally, they're in the grimpen mire on this... legally, and/or practically, who knows?

i'm still inclined to write/email a complaint, then *maybe* follow it up with FOS - but I certainly wouldn't bother going to court over it (even if there was £££ to be had at the end of it!).

currently, i'm going to keep the accounts open until 30/40 days after I receive the 60-day notice letter... at that point, if there is no further progress on this, then i'll close the accounts.

for the record, I would like to keep the accounts free forever - I just don't see a way that it will happen.

magpiecottage

janusdesign wrote: »

at which point, surely they would just appeal to a higher court?

No - a decision by an Ombudsman is legally binding on the firm if accepted by the complainant. The court cannot then overturn the Ombudsman's decision.

janusdesign

magpiecottage wrote: »

No - a decision by an Ombudsman is legally binding on the firm if accepted by the complainant. The court cannot then overturn the Ombudsman's decision.

aah sorry, I lost track of who we were talking about - my fault.

I thought you were referring to the County Court, rather than the Ombudsman - looking back through the thread, I see this did refer to the FOS.

I still think the FOS is the best bet to keep the accounts free, but my concern is a) whether they will side with us and b) if their decision comes after the end of the 60-days notice letters... if it does, then the decision will be irrelevant to a lot of customers as they will have closed their accounts - i'm certainly not paying any fees in the hope that FOS will eventually come down on the right side at some later point.

magpiecottage

janusdesign wrote: »

aah sorry, I lost track of who we were talking about - my fault.

No worries

I still think the FOS is the best bet to keep the accounts free

I agree

my concern is a) whether they will side with us

That is a concern I have too. However, I think the case is quite strong because the evidence of the promise is there and in view of the mess Lloyds TSB has got itself into by reneging on the Halifax pet insurance, I think we are likely to find the complaint is viewed sympathetically.

my FOS form (which was sent today) says

"Whilst [MY COMPANY] accepts that the terms and conditions of the account say they can be changed, we believe Santander should honour the commitment it gave when it was called Abbey National because

1. Mr Niven's letter amounts to a promise and a guarantee, which was, entirely reasonably, interpreted as such by [MY COMPANY] Limited when choosing to open the account. We would remind you that it has, in the past, been the practice of the Financial Ombudsman Service to require firms to honour such a guarantee. This has been the case, for example, with mortgage endowments (in which you routinely check for such evidence whether the complainant has raised the issue or not) and also of the guidance given by the Financial Ombudsman Service on its website at http://www.financial-ombudsman.org.uk/publications/technical_notes/com-inv-per.htm . Whilst we realise this relates to investment performance, the principle remains that Abbey National, as it then called itself, made a promise.
2. The words“Free Banking Forever” are in unequivocal bold type in Mr Niven's letter, whilst nowhere was prominence given to facility to change the terms and conditions of the account. As a senior official, Mr Niven was clearly empowered to enter into a collateral contract on behalf of Abbey National PLC and his letter amounts to such a collateral contract, which overrides any provision in the main terms and conditions permitting subsequent changes to those terms and conditions. So our assertion is that Mr Niven's letter amounted to a collateral contract and in accordance with the principle illustrated by case study 2 on that Santander UK PLC (AKA Abbey National PLC) should honour it.
3. Section 8.1 of the March 2003 edition of the Business Banking Code (which was in force at the time) said “We will make sure that our advertising and promotional literature is clear, fair, reasonable and not misleading". To say "free forever" and not mean it is unclear, unfair and misleading.

[MY COMPANY] accepts that Santander UK PLC has the right to exercise legitimate commercial judgement in the conduct of its business. However, for the exercise of commercial judgement to be legitimate, it must be done in the knowledge that it will have to stand by that judgement – even if, with the benefit of hindsight, a business would have chosen a different course. Therefore, it is our assertion that by pretending that the promise was never made it is in breach of FSA Principle 8.

In one of the web pages published by Abbey National at the time we opened the account, it said “We treat our small and medium-sized businesses in precisely the same way you treat customers of your own. With respect, transparency, flexibility and care”. [MY COMPANY] has never, and will never, make a promise to a customer and not deliver on that promise – even if that means we are left out of pocket. We consider it poor extremely poor business practice to do otherwise.


We have also found that the March 2003 guidance on the Business Banking Code, published by the Banking Code Compliance Board says, on page 17 “Customers should be given, before they open an account and at any time they ask, details of the main charges which apply to their particular account, including what is included and excluded during any ‘free banking’ period.” We think it is clear that our “free banking” period lasts forever and has therefore not yet expired!


On the same page, it says “It would also be advisable to include a warning that the charges may change in the future.” Abbey National did not do this.

if their decision comes after the end of the 60-days notice letters... if it does, then the decision will be irrelevant to a lot of customers as they will have closed their accounts - i'm certainly not paying any fees in the hope that FOS will eventually come down on the right side at some later point.

I agree. However, the risk to Santander is that if FOS do find in the customer's (i.e. yours and my) favour, they couldl then have to reinstate the account with what would then be a gold plated guarantee, meet any costs incurred by moving elsewhere and possibly have to redress your business for the inconvenience caused.

In addition, if it became apparent that Santander pressed ahead with the changes when it knew that FOS was considering a lot of complaints on the issue and it then lost them, it would raise the possibility of FSA (or FCA) intervention.


In the meantime, I have put some material which may be of use online here.

Gosdensg

I e-mailed the CEO with my complant and got a 'phone call back within half an hour. The e-mail is
[EMAIL="ceo@santander.co.uk"]ceo@santander.co.uk[/EMAIL]

They are both worth e-mailin. This decsion was taken on the back of a survey of just 2,000 - the number of business bank accounts is over 200,000. A sample size of 1% is spurious.

Complaing to the Ombudsman is simple and costs Santadner up to £500 a time - the more that complain the merrier.

Victor_Mildrew

magpiecottage wrote: »

In the meantime, I have put some material which may be of use online here.

Thanks for all this. I've got it all except the "Welcome Letter" which would'nt open. Any chance you could post it again?:)

janusdesign

Gosdensg wrote: »

This decsion was taken on the back of a survey of just 2,000 - the number of business bank accounts is over 200,000. A sample size of 1% is spurious.

not necessarily - political opinion polls commonly use a sample of this size, but it *must* be a representative sample otherwise the results are meaningless.

[mind drifts back to my years studying maths & stats at Uni... most of that knowledge has got lost in the fog!]

if the majority of those questioned where at the 'successful' end of the range, and for want of a better word, had "outgrown" the fee-free account and wanted expanded facilities and services, then I can see why Santander might have jumped to their conclusion to effectively withdraw the fee-free accounts.

but if Santander have come to their decision based on bad information, then there may be slightly more likelihood of a change of mind on their part.

that being the case, I would urge anyone who hasn't done so already to complain to Santander - i'll certainly be doing that before the end of the week.

janusdesign

magpiecottage wrote: »

In the meantime, I have put some material which may be of use online here.

thanks for doing that - it's much appreciated.

I can confirm what Victor says, the welcome letter pdf seems corrupt in some way and doesn't open.

magpiecottage

janusdesign wrote: »

I can confirm what Victor says, the welcome letter pdf seems corrupt in some way and doesn't open.

Sorry - I have placed it here for now.

Do note the second paragraph where Niven uses the word "guaranteed".

magpiecottage

I think I am on to something with this letter.

Paragraph 1 says

"I am sure you you will be pleased with the decision you made and would like to remind you of the main benefits of the account".

This clearly shows that these were at least likely to have been factors that you relied on in deciding to open the account - so anything Niven goes on to say appear to be at least a collateral contract.

The first thing he says is Abbey National will "continue to offer both Free banking and interest on credit balances. So you'll get fairer and better value business banking - guaranteed".

Three important words in that.

"continue" is defined by the OED as "to go on doing, not to cease"

"Free" is clearly as in "beer" rather than speech

"guaranteed" is defined by the OED as "to undertake with respect to (a contract, the performance of a legal act, etc.) that it shall be duly carried out; to make oneself responsible for the genuineness of (an article); hence, to assure the existence or persistence of"

Then he says "With the Free Banking Forever tariff, provided you operate within the specified transaction limits, you need never pay any bank charges".

"Forever" is defined by the OED as "At no time or moment; on no occasion; not ever"

(No I haven't invested in my own copy of the OED - in the glorious tradition of MSE, I found out that my library subscribes to it online and only need to put in my card number!)