Santander free forever bank account changes

RichardStevensons

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. 

Or looking at a different way, if all 150,000 business went to the FOS, at a cost of £650 each to Santander... That's £97.5million just in penalties alone. 

That's 5.5 years worth of £9.99s per business that stays with them.  

The maths doesn't really add up and I don't get why they're risking such large somes? 

RichardStevensons

RichardStevensons said:

That's 5.5 years worth of £9.99s per business that stays with them.  

 

Sorry, to correct myself.. .. 

That's 5.5 years worth of £9.99s per business, assuming all 150,000 stay with them.  

Futuristic

RichardStevensons said:

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. 

Or looking at a different way, if all 150,000 business went to the FOS, at a cost of £650 each to Santander... That's £97.5million just in penalties alone. 

That's 5.5 years worth of £9.99s per business that stays with them.  

The maths doesn't really add up and I don't get why they're risking such large somes? 

Thats a big if. I'd be surprised if even 1/10th end up going all the way to FOS but anyones guess really.

I assume many businesses will simply pay the fee as its not worth their time fighting for £120/yr or switch away (very easy these days thanks to CASS and many free (even high street) alternatives). 

LadyJaz

Futuristic said:

Thats a big if. I'd be surprised if even 1/10th end up going all the way to FOS but anyones guess really.

I assume many businesses will simply pay the fee as its not worth their time fighting for £120/yr or switch away (very easy these days thanks to CASS and many free (even high street) alternatives). 

For some of us 'oldies' its easier going to the FOS and submitting a complaint online than it is to switch accounts which requires certain kinds of ID or proof of income or other such like documents  

Section62

LadyJaz said:

Futuristic said:

Thats a big if. I'd be surprised if even 1/10th end up going all the way to FOS but anyones guess really.

I assume many businesses will simply pay the fee as its not worth their time fighting for £120/yr or switch away (very easy these days thanks to CASS and many free (even high street) alternatives). 

For some of us 'oldies' its easier going to the FOS and submitting a complaint online than it is to switch accounts which requires certain kinds of ID or proof of income or other such like documents  

And the two things aren't mutually exclusive - for those who want to, they can take a FOS complaint all the way, and do a CASS switch.

Unfortunately there have been some somewhat misleading or misdirecting posts in this thread.  For clarity, once you've got your final response from Santander then it only takes a few minutes to complete the online FOS complaint form.  It isn't difficult or time consuming. Shorter answers to the text-based questions are likely to be better than long and detailed descriptions of the issues.  And going to FOS is free for the customer.

eskbanker

LadyJaz said:

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..........

RichardStevensons said:

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. 

Or looking at a different way, if all 150,000 business went to the FOS, at a cost of £650 each to Santander... That's £97.5million just in penalties alone. 

That's 5.5 years worth of £9.99s per business that stays with them.  

The maths doesn't really add up and I don't get why they're risking such large somes? 

Because the actual business case for this move will be based on far more realistic assumptions!

Santander may legitimately be seen as untrustworthy and so on but they aren't stupid - there is obviously an argument that they misjudged the situation last time they attempted this, but the fact that they had to reverse their decision then, at financial and reputational cost, will presumably mean that if they consider it appropriate to try again, they'll have learned the relevant lessons and be more confident in their legal position and financial modelling.

Section62

eskbanker said:

LadyJaz said:

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..........

RichardStevensons said:

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. 

Or looking at a different way, if all 150,000 business went to the FOS, at a cost of £650 each to Santander... That's £97.5million just in penalties alone. 

That's 5.5 years worth of £9.99s per business that stays with them.  

The maths doesn't really add up and I don't get why they're risking such large somes? 

Because the actual business case for this move will be based on far more realistic assumptions!

Santander may legitimately be seen as untrustworthy and so on but they aren't stupid - there is obviously an argument that they misjudged the situation last time they attempted this, but the fact that they had to reverse their decision then, at financial and reputational cost, will presumably mean that if they consider it appropriate to try again, they'll have learned the relevant lessons and be more confident in their legal position and financial modelling.

...or the corporate memory doesn't go back to 2012.

eskbanker

Section62 said:

eskbanker said:

LadyJaz said:

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..........

RichardStevensons said:

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. 

Or looking at a different way, if all 150,000 business went to the FOS, at a cost of £650 each to Santander... That's £97.5million just in penalties alone. 

That's 5.5 years worth of £9.99s per business that stays with them.  

The maths doesn't really add up and I don't get why they're risking such large somes? 

Because the actual business case for this move will be based on far more realistic assumptions!

Santander may legitimately be seen as untrustworthy and so on but they aren't stupid - there is obviously an argument that they misjudged the situation last time they attempted this, but the fact that they had to reverse their decision then, at financial and reputational cost, will presumably mean that if they consider it appropriate to try again, they'll have learned the relevant lessons and be more confident in their legal position and financial modelling.

...or the corporate memory doesn't go back to 2012.

If the current management are in blissful ignorance of the history of this then yes, that could certainly be categorised as stupid!

Smurrfmo

Regarding the comments above about the need to prove a loss before taking court action that is not quite true.  There are a number of avenues that can be pursued in court including the remedy of "specific performance" to force Santander to honour the contract.  Their lawyers will be well aware of the danger both from the FOS and the courts.

noitsnotme

Smurrfmo said:

Regarding the comments above about the need to prove a loss before taking court action that is not quite true.  There are a number of avenues that can be pursued in court including the remedy of "specific performance" to force Santander to honour the contract. 

I believe that is not the case with small claims court, which is what the previous comments were relating to.