Santander is facing a backlash from thousands of small business owners after announcing it will begin charging £9.99 a month for business accounts previously advertised as "free for ever." Customers who opened accounts as far back as 2005 with written guarantees of no fees are now accusing the bank of misrepresentation and breaking its promises.
Key takeaways
- Santander is introducing a £9.99 monthly charge for business accounts previously guaranteed as "free for ever."
- Thousands of small business owners, some with written guarantees from as early as 2005, are affected.
- The bank claims that account terms changed during a 2015 migration, nullifying the "free for ever" promise.
- This is not the first time Santander has attempted to introduce charges on these accounts, having U-turned in 2012 after customer threats of legal action.
Santander reneges on ‘free for ever’ promise
Santander’s decision to impose a £9.99 monthly fee on business accounts, effective from October, has sparked outrage among its long-standing customers. Many of these account holders, including sole traders like Dave Lawrence*, opened their accounts with explicit written assurances that they would "never pay banking charges again."
Lawrence, who opened his account in 2005, questioned Santander’s interpretation of "for ever" and its justification for introducing charges despite clear pledges. Similarly, graphic designer Jennifer Iles, who also signed up due to the "free for ever" promise, expressed her dismay, stating, "Now they are not only trying to renege again but are denying the obligation. They will have a fight on their hands."
A history of broken promises
This is not the first instance of Santander attempting to introduce charges on these specific accounts. In 2012, the bank was forced to reverse similar proposed charges after customers threatened legal action. At the time, Santander claimed the move was in response to customer demand for upgraded services.
Santander, which acquired Abbey National in 2004 and later rebranded after further acquisitions, has stated that accounts predating the 2008 merger of Abbey and Alliance & Leicester were migrated into its Business Every Day account in 2015. A spokesperson for the bank asserted that the terms and conditions of this new contract did not include the "free for ever" promise. However, affected customers like Lawrence and Iles maintain they were never notified that this crucial guarantee had been withdrawn during the migration process.
Principle over cost
While the £9.99 monthly charge may not be substantial for all businesses, customers emphasise that the dispute is fundamentally about principle. Lawrence articulated this sentiment, stating, "If I had originally signed up to a business bank account that cost £9.99 a month that would have been my choice, but I opened the account with the promise in writing of free banking for ever. The charges are not huge; it is the principle that matters."
Santander has indicated that the change is a step towards simplifying its business banking offering to "sustainably and efficiently evolve to better meet the needs of our business customers in the future," citing significant changes in the business banking landscape over the last decade.
*Name has been changed.
