Santander U-turn on free business accounts

[Michael Browne]

Santander has staged an about-turn and will no longer withdraw its "free banking forever" account from 230,000 small business customers.

 

The original decision, first revealed in late July, upset some customers who thought the bank was reneging on an unbreakable promise to them.

 

They would have had to pay either £7.50 or £12.50 a month for a business bank account that was previously free.

 

Santander had previously said it was within its right to change the account.

 

But less than two months after first announcing the change, it has reversed its policy.

 

"After listening to feedback from our existing customers, a small number of whom do not feel their businesses would benefit from these changes, we will be retaining the fee-free option for existing customers," a spokesman said.

 

One factor that may have weighed on the bank's mind is that every one of the affected customers could have taken their complaint to the Financial Ombudsman Service (FOS).

This would have cost the bank £500 each time in FOS administration fees and could, theoretically, have landed it with a bill of £115m if every customer had taken this route.

 

 

http://www.bbc.co.uk/news/business-19506634