Santander free forever bank account changes

gt94sss2

I posted this maybe 60 pages ago(!) but given recent posts about the Ombudsman, am posting it again 

For those considering using the Financial Ombudsman for issues, its worth noting that the Government has issued a new consultation reviewing their future powers that you may want to respond too.

To me, it reads as a weakening of their role and includes a proposal that "the FOS will be required to find that a firm’s conduct is fair and reasonable where it has complied with relevant FCA rules"

https://forums.moneysavingexpert.com/discussion/6618175/review-of-the-financial-ombudsman-service

born_again

Section62 said:

A final decision made by a FOS ombudsman is legally binding on the financial business.  If a financial business attempted to circumvent the legally binding nature of the decision by closing the customer's account(s) then I'd expect FOS to take a very dim view of it.  I don't know, but I suspect the result would be a referral of the matter to the FCA for regulatory action to be taken against the business.  (Rule DISP 3.7.12)

I'd really hope the senior management at Santander wouldn't be so idiotic as to respond to an adverse FOS decision by closing the customer's account.... that could really make a bad situation much worse.

Yes it is binding.

Still does not stop Santander from pulling the account after refunding people for the charges in the notice period.

FOS have no remit to force any financial institution to keep accounts open.
If Santander were so minded & they have mooted this. They could simply pull out of UK banking.

GeoffTF

born_again said:

Section62 said:

A final decision made by a FOS ombudsman is legally binding on the financial business.  If a financial business attempted to circumvent the legally binding nature of the decision by closing the customer's account(s) then I'd expect FOS to take a very dim view of it.  I don't know, but I suspect the result would be a referral of the matter to the FCA for regulatory action to be taken against the business.  (Rule DISP 3.7.12)

I'd really hope the senior management at Santander wouldn't be so idiotic as to respond to an adverse FOS decision by closing the customer's account.... that could really make a bad situation much worse.

Yes it is binding.

Still does not stop Santander from pulling the account after refunding people for the charges in the notice period.

FOS have no remit to force any financial institution to keep accounts open.
If Santander were so minded & they have mooted this. They could simply pull out of UK banking.

Perhaps this has something to do with Santander's timing:

https://www.gov.uk/government/news/millions-of-people-and-businesses-protected-against-debanking

Renfrewman

GeoffTF said:

born_again said:

Section62 said:

A final decision made by a FOS ombudsman is legally binding on the financial business.  If a financial business attempted to circumvent the legally binding nature of the decision by closing the customer's account(s) then I'd expect FOS to take a very dim view of it.  I don't know, but I suspect the result would be a referral of the matter to the FCA for regulatory action to be taken against the business.  (Rule DISP 3.7.12)

I'd really hope the senior management at Santander wouldn't be so idiotic as to respond to an adverse FOS decision by closing the customer's account.... that could really make a bad situation much worse.

Yes it is binding.

Still does not stop Santander from pulling the account after refunding people for the charges in the notice period.

FOS have no remit to force any financial institution to keep accounts open.
If Santander were so minded & they have mooted this. They could simply pull out of UK banking.

Perhaps this has something to do with Santander's timing:

https://www.gov.uk/government/news/millions-of-people-and-businesses-protected-against-debanking

Labour and protecting businesses....aye right!

Section62

born_again said:

Section62 said:

A final decision made by a FOS ombudsman is legally binding on the financial business.  If a financial business attempted to circumvent the legally binding nature of the decision by closing the customer's account(s) then I'd expect FOS to take a very dim view of it.  I don't know, but I suspect the result would be a referral of the matter to the FCA for regulatory action to be taken against the business.  (Rule DISP 3.7.12)

I'd really hope the senior management at Santander wouldn't be so idiotic as to respond to an adverse FOS decision by closing the customer's account.... that could really make a bad situation much worse.

Yes it is binding.

Still does not stop Santander from pulling the account after refunding people for the charges in the notice period.

Again, if an Ombudsman directed Santander not to impose charges having promised to provide a 'free forever' business account, and Santander's response was to close the accounts instead, then I'd expect FOS to take a very dim view of that and it probably wouldn't be the end of the story.

If banks opt to close customer accounts (as they are free to do in normal circumstances) as a response to adverse FOS decisions then it could have the effect of dissuading customers from making complaints and taking them to FOS.  There is a wider public interest issue there - I cannot see how the FOS, the FCA, or the government would sit back and let that happen.

born_again said:

FOS have no remit to force any financial institution to keep accounts open.

Source?

born_again said:

If Santander were so minded & they have mooted this. They could simply pull out of UK banking.

Seems a rather extreme response to being required to continue providing a couple of hundred thousand free current accounts... surely the loss from quitting the UK market would greatly exceed the cost of providing a relatively small (and decreasing) number of free current accounts?  How would Santander explain such a rash action to shareholders?

Renfrewman

They can close a product and offer another....that's not debanking.

GeoffTF

Section62 said:

Again, if an Ombudsman directed Santander not to impose charges having promised to provide a 'free forever' business account, and Santander's response was to close the accounts instead, then I'd expect FOS to take a very dim view of that and it probably wouldn't be the end of the story.

This is hypothetical upon hypothetical. I think the point is that the Ombudsman might be deterred from making such a ruling if he thought that the customer's account might be closed as a result. I do not expect that Santander is relying on that though.

Section62

GeoffTF said:

Section62 said:

Again, if an Ombudsman directed Santander not to impose charges having promised to provide a 'free forever' business account, and Santander's response was to close the accounts instead, then I'd expect FOS to take a very dim view of that and it probably wouldn't be the end of the story.

This is hypothetical upon hypothetical. I think the point is that the Ombudsman might be deterred from making such a ruling if he thought that the customer's account might be closed as a result. I do not expect that Santander is relying on that though.

I think the opposite.  An Ombudsman is not going to be deterred by a bank's threat to close someone's account if the Ombudsman makes a determination the bank doesn't like.

I'm starting to wonder if people are forgetting that banking is regulated, and there are consequences for financial service providers if they break the rules.

For example, if a bank decided it was appropriate to use account closure as a 'punishment' for someone sucessfully complaining to FOS.  Do people really believe that would be Ok, and accepted by FOS and/or the FCA as reasonable conduct?

GeoffTF

Section62 said:

GeoffTF said:

Section62 said:

Again, if an Ombudsman directed Santander not to impose charges having promised to provide a 'free forever' business account, and Santander's response was to close the accounts instead, then I'd expect FOS to take a very dim view of that and it probably wouldn't be the end of the story.

This is hypothetical upon hypothetical. I think the point is that the Ombudsman might be deterred from making such a ruling if he thought that the customer's account might be closed as a result. I do not expect that Santander is relying on that though.

I think the opposite.  An Ombudsman is not going to be deterred by a bank's threat to close someone's account if the Ombudsman makes a determination the bank doesn't like.

I'm starting to wonder if people are forgetting that banking is regulated, and there are consequences for financial service providers if they break the rules.

For example, if a bank decided it was appropriate to use account closure as a 'punishment' for someone sucessfully complaining to FOS.  Do people really believe that would be Ok, and accepted by FOS and/or the FCA as reasonable conduct?

No threat is needed. The FOS is aware of the rules:

"Businesses that provide bank accounts are generally entitled to close them – just as their customers are. But you should treat your customers fairly. You shouldn’t close an account because of unfair bias or unlawful discrimination. And you shouldn’t usually close an account without giving reasonable notice."

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/banking-and-payments/bank-account-closures

A closed account is free. Closing a bank account does not violate the original "free forever" marketing claim. That claim does not appear to be relevant anyway. It seems that the FOS will have to make its determination on the basis of the current T&Cs.

Section62

GeoffTF said:

Section62 said:

GeoffTF said:

Section62 said:

Again, if an Ombudsman directed Santander not to impose charges having promised to provide a 'free forever' business account, and Santander's response was to close the accounts instead, then I'd expect FOS to take a very dim view of that and it probably wouldn't be the end of the story.

This is hypothetical upon hypothetical. I think the point is that the Ombudsman might be deterred from making such a ruling if he thought that the customer's account might be closed as a result. I do not expect that Santander is relying on that though.

I think the opposite.  An Ombudsman is not going to be deterred by a bank's threat to close someone's account if the Ombudsman makes a determination the bank doesn't like.

I'm starting to wonder if people are forgetting that banking is regulated, and there are consequences for financial service providers if they break the rules.

For example, if a bank decided it was appropriate to use account closure as a 'punishment' for someone sucessfully complaining to FOS.  Do people really believe that would be Ok, and accepted by FOS and/or the FCA as reasonable conduct?

No threat is needed. The FOS is aware of the rules:

"Businesses that provide bank accounts are generally entitled to close them – just as their customers are. But you should treat your customers fairly. You shouldn’t close an account because of unfair bias or unlawful discrimination. And you shouldn’t usually close an account without giving reasonable notice."

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/banking-and-payments/bank-account-closures

A closed account is free. Closing a bank account does not violate the original "free forever" marketing claim. That claim does not appear to be relevant anyway. It seems that the FOS will have to make its determination on the basis of the current T&Cs.

So would closing an account because an Ombudsman has determined it should continue to be provided free of charge (in accordance with a promise made by the bank) be considered 'fair'?  That is the fundamental question here.