Santander free forever bank account changes

jackjones01

This was in the media recently: 

https://www.thesun.co.uk/money/35904842/santander-customers-fume-new-fee-bank-account/?fbclid=IwQ0xDSwLxh5NleHRuA2FlbQIxMQABHvoVFRkXJhpNM5doZjVVYP9Xr00IyBzeM3D0_E5wV-E6y1cuwUxFaPMvrDId_aem_pWpgFDHX0m7mBQxNf22IwA

I haven’t read the whole thread so apologies if it’s already been mentioned. 

Section62

subjecttocontract said:

Whichever way the FOS ruling turns out,  Santander may still decide their legal advice supports their decision to charge for business accounts so may still steam ahead with the changes.

Equally, it may never get to an ombudsman decision if the number of cases being taken to FOS starts mounting up.

subjecttocontract said:

The cheapest way to proceed would be through the SCC.

AIUI you have to have an actual loss to go via the MoneyClaim route.  You can't claim on the basis charges you didn't agree to over the next 'x' years will cost you '£z'.  If so, the claimants would have to wait until they had been charged, and then individually make claims for the charges to date.  A successful claim wouldn't set precedent, so each case would be considered on its own merits, including if the same claimant goes back (say) a year later to claim the next tranche of charges.

subjecttocontract said:

High court action would be very costly as it requires claimants to have insurance in place to cover the cost of loosing.

AIUI there is no requirement to have insurance to commence a claim in the high court, but if no win-no fee or group action solicitors are used to take a claim forward then they are likely to want to cover their costs via insurance (that the claimants would pay for up front).  So 'very costly' is somewhat subjective, as the actual costs would depend on the numbers of people (if any) joining the action together with the premium charged.  Which in turn would probably be based on a case risk assessment.  In any event, unless there was a reasonably good chance of winning it is unlikely solicitors would want to take the case on this basis.

I'd guess within the cohort of people affected by this decision there will be enough with the necessary organisational skills and finances to take an action forward - if they feel strongly enough - and if legal advice suggests there is a reasonable prospect.

This is all a bit hypothetical though as we don't know what will happen when FOS gets involved.  Also, IANAL.

LadyJaz

I'm really surprised that Santander has brought this trouble upon itself, risking its reputation and future success, for what cannot be much, if any, financial gain. Public faith in banks and other insitiutions like the Post Office is at an all time low and any negative press, even if just by social media, will make people think twice about opening an account with Santander. 

It would surely be better for them to honour their promise of free business banking forever by continuing to provide basic business accounts for legacy customers. Indeed, I'm surprised they have never planned for this, knowing what they promised and inherited. It wouldn't effect the rest of their offerings and the number of these legacy accounts will naturally dwindle as customers retire. As some people might only have been in their 20s when they took out an account in the 2000s, Santander could potentially be 'saddled' with their 'free forever' promise until about 2050 and should have planned for this.

Clearly it was foolish, in retrospect, to offer free forever business banking, especially if they had no intention of honouring it, but they did promise it and therefore should be held to account for their promise. But, above all, they should WANT to honour it if they have any integrity. 

singhini

LadyJaz said:

I'm really surprised that Santander has brought this trouble upon itself, risking its reputation and future success, for what cannot be much, if any, financial gain. Public faith in banks and other insitiutions like the Post Office is at an all time low and any negative press, even if just by social media, will make people think twice about opening an account with Santander. 

It would surely be better for them to honour their promise of free business banking forever by continuing to provide basic business accounts for legacy customers. Indeed, I'm surprised they have never planned for this, knowing what they promised and inherited. It wouldn't effect the rest of their offerings and the number of these legacy accounts will naturally dwindle as customers retire. As some people might only have been in their 20s when they took out an account in the 2000s, Santander could potentially be 'saddled' with their 'free forever' promise until about 2050 and should have planned for this.

Clearly it was foolish, in retrospect, to offer free forever business banking, especially if they had no intention of honouring it, but they did promise it and therefore should be held to account for their promise. But, above all, they should WANT to honour it if they have any integrity. 

A bank is in a lose-lose situation when it comes to reputation. 
Also, most people don't care about something if it doesn't affect them (since these are business accounts, there will be fewer people bothered unfortunately). 
Furthermore, public faith soon changes when "switch bribes" are on offer (people soon forget about what they read in The Sun Newspaper the day before if £180 is on the table). 

Integrity is an interesting one as both parties should have integrity. By all means fight your corner, but ultimately its time to move on if people are saying the trust between both parties has been lost and images depicting the devil are being thrown around. 

EDIT: i'm off to smoke a joint!
160oC for 6 hours should do it

LadyJaz

singhini said:

A bank is in a lose-lose situation when it comes to reputation. 
Also, most people don't care about something if it doesn't affect them (since these are business accounts, there will be fewer people bothered unfortunately). 
Furthermore, public faith soon changes when "switch bribes" are on offer (people soon forget about what they read in The Sun Newspaper the day before if £180 is on the table). 

You are absolutely correct on this. And, sometimes, people have to consider a bank or business they don't like out of sheer necessity.

By my calculation, however, Santander could potentially lose a million accounts over this issue. For example, if there are 150,000 legacy account customers left, all with 2 or 3 accounts with Santander (most of us have at least a personal current account in addition to a business one as it was recommended at the time and makes sense), then if we all leave Santander we take at least 300,000 accounts with us, plus potentially savings and ISAs (possibily amounting to another 150,000 - 300,000 accounts). So from effected customers alone they could lost up to 500,000 accounts. Then family and friends might switch also, potentially say another 2-3 accounts per legacy customer (for as you say the wider public may not care that much). Therefore Sandanter could potentially lose up to 10 accounts per customer, amounting to 1 to 1.5 million accounts. If each of these accounts only brings in £100 a month to Santander they could lose £100 million a month from the loss of one million accounts, £150 million a month from 1.5 million accounts. And as most accounts are worth more than £100 a month then do the maths..........

Obviously Santander believe the potential loss of all these accounts will be compensated for by new customers and existing business customers who are willing to pay the new fee. 

solidpro

I've got about 20 years left of running a business with a free-forever account. Can I just take them to the small claims court for £9.99 x 240, which is about £2,500? That would leave everyone happy. Would be bad PR for Santander, but maybe they're prepared to pay me £2,500 in order to move all the silent account holders over to a cash cow?

noitsnotme

solidpro said:

I've got about 20 years left of running a business with a free-forever account. Can I just take them to the small claims court for £9.99 x 240, which is about £2,500? 

No, because small claims court only deals with actual losses, not possible future losses.  You can’t guarantee your business will run for the next 20 years.  Someone else did explain this above.

singhini

i think anumber of banks are slowly going to move out of high street banking and focus on investment banking (more money to be made and less money to be paid out on things like APP fraud)

WillPS

singhini said:

i think anumber of banks are slowly going to move out of high street banking and focus on investment banking (more money to be made and less money to be paid out on things like APP fraud)

You might be right... but it'd be a strange move to acquire another high street bank if your intention was to exit the market, surely?

subjecttocontract

It sseems there is no easy answer if business account holders want to take legal action :- .
* Small Claims Court......you can only claim for actual losses not future losses.
* High Court......likely to be very expensive individually and still expensive, but less so, if group action is taken.
None of those options look attractive.
So, what's left ? A hope of voluntary advantage provided by the FOS/ Santander themselves.
It'll be interesting to see how this issue unfolds........