Santander free forever bank account changes

Lightning360

amyfairweather said:

Section62 said:

subjecttocontract said:

The situation reminds me of the class action that we took against West Brom B/Soc a few years back regarding BTL mortgage interest increases. We couldn't believe they made the decision that they had. They said they had taken legal advice and were assured they were right......and you'd expect a large organisation to get reliable advice. But they lost in the courts and it cost them £millions in payouts. Their reputation seems unaffected, so perhaps Santander are not overly concerned.

I make the point fairly regularly on the Home/DIY boards that litigation is unpredictable.  You can have a barrister give you a 99.9% chance of winning, then on the day have a judge who agrees with a point you didn't think of (or know about), or decide your 'winning' arguments aren't that persuasive.

Decisions to litigate (or not) are often as much about reputation and consequences, rather than the facts of the case. Losing can be expensive financially, but being seen to lose can have far-reaching consequences.

I suspect a small building society is likely to get a more sympathetic response in the court of public opinion than a PLC bank, especially one which has recently been linked to complaints about banking regulation in the UK.  But nobody knows for sure yet how this might play out.

I suspect most businesses affected by this are small one man band / family enterprises.

Therefore, any court action would be through the small claims court and not financially ruinous should the decision go Santander's way.

I gave the example the other day of someone aged 50 who would be claiming for 16 years of future £9.99's per month in advance towards their retirement age.

If Santander lost the case, but did not back down on the £9.99 payments, I don't think it would be unreasonable to claim £2000 (plus a bit more for cheque/cash bankings) to cover those future payments for 16 years up to their state pension age.  They had, after all, been promised free banking forever and that could reasonably be argued until their retirement age.

What would be unreasonable would be to claim for future £9.99's until they were, say, 100-110 years old (i.e. "forever").

Lightning360 said:

These pictures are really not helping you. They just look too silly 

They appear to be more for instant effect, i.e. on social media, therefore designed to look silly in order to get attention.

It just looks like some sort of scam. It doesn't help the argument at all

eskbanker

Simplistic tabloidy rabble-rousing may have its place in the social media age, but isn't likely to be relevant when grown-ups are trying to establish whether or not Santander's plans are compliant with points of contract and consumer law, and what meaningful actions can be taken to challenge these....

Section62

amyfairweather said:

Section62 said:

subjecttocontract said:

The situation reminds me of the class action that we took against West Brom B/Soc a few years back regarding BTL mortgage interest increases. We couldn't believe they made the decision that they had. They said they had taken legal advice and were assured they were right......and you'd expect a large organisation to get reliable advice. But they lost in the courts and it cost them £millions in payouts. Their reputation seems unaffected, so perhaps Santander are not overly concerned.

I make the point fairly regularly on the Home/DIY boards that litigation is unpredictable.  You can have a barrister give you a 99.9% chance of winning, then on the day have a judge who agrees with a point you didn't think of (or know about), or decide your 'winning' arguments aren't that persuasive.

Decisions to litigate (or not) are often as much about reputation and consequences, rather than the facts of the case. Losing can be expensive financially, but being seen to lose can have far-reaching consequences.

I suspect a small building society is likely to get a more sympathetic response in the court of public opinion than a PLC bank, especially one which has recently been linked to complaints about banking regulation in the UK.  But nobody knows for sure yet how this might play out.

I suspect most businesses affected by this are small one man band / family enterprises.

Therefore, any court action would be through the small claims court and not financially ruinous should the decision go Santander's way.

I gave the example the other day of someone aged 50 who would be claiming for 16 years of future £9.99's per month in advance towards their retirement age.

If Santander lost the case, but did not back down on the £9.99 payments, I don't think it would be unreasonable to claim £2000 (plus a bit more for cheque/cash bankings) to cover those future payments for 16 years up to their state pension age.  They had, after all, been promised free banking forever and that could reasonably be argued until their retirement age.

What would be unreasonable would be to claim for future £9.99's until they were, say, 100-110 years old (i.e. "forever").
....

I was replying to subjecttocontract's points in more general terms about litigation outcomes and reputational risk, not specifically to the individuals involved in possible claims against Santander.

That said, 'small claims' don't usually create precedent, so one business claiming against Santander wouldn't necessarily lead to a payout to all affected businesses.  Each business would need to claim separately, and there is no guarantee all the claims would go the same way.

It is possible that a large number of claims (or complaints to FOS) might get Sanntander to back down, but also possible that Santander could go to court to get an order confirming introduction of charging was fair and lawful (which would then block further MCOL's/FOS complaints).

What subjecttocontract was referring to was a class action case taken to the High Court (and appealed).  The potential cost implications of that are much greater for both parties, but if the action is taken by a significant number of claimants the financial liability for each one is more modest.  More to the point, sucessful action in the High Court would be precedent setting, so all businesses affected by the charges could rely on the outcome of the case to make their own claim (if not party to the class action) which is an outcome Santander would likely want to avoid (either by backtracking the decision, or by making a compensatory offer to those affected).

As for the sums involved, I don't think someone running a small business would necessarily expect to stop at state pension age - particularly if they have employees and/or family members who help run the business.  There's no reason to think "forever" means 'until reaching age 65'.  However, the uncertainty about how long someone might continue to need their free business account could be a weakness in any 'small claims' for a specific amount.

frittendenme

Lucky there’s space for all of us — even us simplistic, tabloidy types trying to stir up a bit of noise. As for the “grown-ups” comment… bold move. You might want to climb down off that horse before the altitude goes to your head. Not everyone tackling a problem does it with a lecture and a spreadsheet.

Do you wanna see the Coldplay meme someone made grandad?

solidpro

frittendenme said:

Do you wanna see the Coldplay meme someone made grandad?

   

solidpro

Yorkshire live: https://www.examinerlive.co.uk/news/cost-of-living/santander-charging-customers-120-year-32088078

MSN: https://www.msn.com/en-gb/money/other/santander-charging-customers-120-a-year-as-users-slam-disgusting-move/ar-AA1IQJW5

The Sun: https://www.thesun.co.uk/money/35904842/santander-customers-fume-new-fee-bank-account/

headsman

Section62 said:

As for the sums involved, I don't think someone running a small business would necessarily expect to stop at state pension age - particularly if they have employees and/or family members who help run the business.  There's no reason to think "forever" means 'until reaching age 65'.  However, the uncertainty about how long someone might continue to need their free business account could be a weakness in any 'small claims' for a specific amount.

The business is the relevant entity for this discussion, not the person owning / running it.  It has the legal status of an individual on its own and there's no retirement age for a business and the ownership can change.

irritated_tyke

I received our letter from Santander last weekend and have been considering how to frame our rejection of the proposed amendment to the T&Cs of the contract, as we did the last time they attempted to do so back in 2012.

As has been stated elsewhere in this thread, the "Free Banking Forever" promise was made with very limited specific caveats in respect of changes to law, regulation and taxation attached to it. The general T&Cs supplied by Abbey in 2002 were headed "Business Banking Conditions" and were stated to refer to "your Abbey National Business Bank Account, Business Reserve Account, Client Bank Account and Client Reserve Account". The Free Banking Forever statement was present in a separate Tafiffs and Interest Rates document referenced under §1.1.1.1 of the general T&Cs. §5.1.1 of the T&Cs did say that the Conditions could be changed subject to notice being given.

My own interpretation of the above is that it would be unreasonable of Santander (having taken over Abbey National's contracts) to renege on the Free Forever promise, which was a very clear and direct offer designed to attract business customers, by effectively saying, "we don't like it and have changed our minds". I can see why they might not like it but that is not our problem, we agreed a contract which offered Free Business Banking within specified transaction limits and we expect Santander to honour that commitment.

I have seen several comments questioning what "Forever" means in the context of these accounts. In our case I interpret it as meaning, for as as long as our Limited Company continues in business, whether I remain as a director or owner of it is immaterial, the contract was formed between companies. Obviously that may be different for sole traders.

There are also many comments about Santander being able to change T&Cs because they are changing the 'product' they are providing. My view is that it is immaterial what they choose to call their accounts, we contracted for Business Banking (Business Current Account and Business Reserve Account), we do not care what Santander choose to call these or how they market them, we only expect that, for as long as they continue to provide such business banking services, they make them available to us on the terms agreed.

This brings me to something I have not yet seen mentioned  in this thread.
Santander have proposed to "change" our account type to "Business Current Account -- Classic". The Key Facts Document provided states in the first of its Specific Conditions - Eligibility , that "you can have this account if you: are a sole trader or a business partnership, limited liability partnership or private limited company registered in the UK" and "have a maximum of two directors, owners (shareholders) or partners who are 18 or over and live in the UK".

As our private limited company has had three directors ever since we opened our Abbey National account, when we had to provide evidence of who we were (so this should not be unkown to Santander), I am not at all impressed by their offer to change our business account to one we are not eligible for under their own T&Cs.

My assumption is that when I make them aware of their incompetence, they will tell me that what we are eligible for is one of their Corporate accounts that have fees per transaction that would work out at least four  times higher than the currently proposed monthly fee, even for our relatively modest number of  transactions. Under those terms it is  worth seeking to retain "Free Banking Forever" for the foreseeable future, and to make Santander aware that we expect them to behave in a reputable manner in accordance with the normal laws of contract and the prevailing banking regulations.

solidpro

irritated_tyke what a great great post.

"Santander faces backlash over charges on ‘free forever’ business accounts"

Business Matters Magazine: https://bmmagazine.co.uk/in-business/santander-free-forever-business-account-fees/

sdd56

Well I've now had the letter too. I'm one of the original Abbey National "Free Forever" applicants.

But they are not making it easy to make a complaint - I've now been on hold on the phoneline for 30 minutes...

"We really appreciate your time, your respect, and your kindness".

I am rapidly running out of all three.