Questions of Cash: Santander pulled plug on our guaranteed free banking


Q. About 12 years ago, our small firm opened a business account with Abbey on the basis of what their brochure called "Free, day-to-day, business banking – not for 12 months, 18 months, or even two years, but forever… and we guarantee that unless there are any changes to the law or banking regulations, or any new taxes relating to bank charges, you will benefit from free, day-to-day, business banking forever".

We assumed that when Santander took over Abbey it acquired its assets and liabilities, that our business account is an asset and the commitment to free, day-to-day banking a liability. In July this year we were given notice that Santander intends to start charging a fixed monthly fee on our account. On writing to them we were told they have the right to do that having given 60 days' notice. Do you think we were mis-sold a product and Santander is in breach of contract? If necessary, we will go to the Financial Ombudsman Service (FOS). JK, Leicestershire.

A. Santander insists it is not in breach of contract law in making the change. A Santander spokeswoman gave us a statement saying it believed most of its business customers would recognise the new account terms would better meet their needs. The spokeswoman added: "We are trying to give customers as much notice as possible about the change – hence this initial correspondence ahead of the 60-day required notice." But Santander had not addressed the specific point about whether it is legally committed to maintaining the pledge entered into by Abbey, which it bought in 2004. The spokeswoman responded: "Santander inherited the free business bank accounts from Abbey and Alliance & Leicester.

Following Santander's acquisition of both businesses we analysed both inherited books and the business banking market and it simply isn't viable for us to continue offering business customers these accounts and the services they want, for free... We believe that the majority of our customers will see that this new account is highly competitive and gives them the all-round service they demand so that they can concentrate on growing their businesses." We pointed out, again, that the bank was not dealing with the point about whether it was breaching a legally valid contact in making the change. We then got the explanation we were seeking.

The spokeswoman said: "Our terms and conditions state that we could change the account at any time. We are sorry if customers are disappointed by the change, but we believe our accounts are extremely competitive and we hope that our customers will see the benefits and understand they are very good value." Even if Santander can argue it is legally in the right, many business customers are likely to say it is morally in the wrong. You state you are willing to take the matter to the FOS. While the ombudsman is primarily concerned with consumer complaints, it can also consider complaints from "micro-enterprises", defined as those with less than 10 employees and an annual turnover of under £1.5m. If your business meets those criteria, we suggest you complain to the FOS.

Q. I found out I had an 18 months contract with BT only when I tried to cancel the service. This was contrary to what I was promised over the phone when I placed the order. I requested a 12-month contract as I rented the property and could not make a commitment beyond that time. I contacted BT and requested a revision of my final bill as I was given the wrong information over the telephone. BT also sold me an international telephone package to provide free calls to Mexico, but Mexico was not covered in the package.

I have twice told BT that I was content to pay the cancellation fee and a fair partial payment of their bill, to avoid a debt collection company being engaged. BT told me that a recording of the original call had to be checked and someone would come back to me within five days, but no one did. I also wrote a letter of complaint asking for the final bill to be revised, which was not answered. After months trying to settle the bill, I have now had a letter from a debt collection company. I rang BT and it immediately corrected the final bill. Since then, I have sent a letter to BT requesting a written answer to my complaint about the service, together with compensation for the time, effort and distress caused by its mistakes, but I have not had a response. SB, Manchester.

A. BT says the order was placed verbally by the person you shared accommodation with on 21 October 2011 and the service installed one week later. The service was its "Option 1" package, with unlimited evening and weekend calls at £13 per month on an 18-month contract, with three months free. The terms of this contract were apparently confirmed by email to you. As you cancelled less than six months later, the cancellation fees would apply whether it was a 12 or 18-month contract.

The final bill included £46 for the BT Home Hub and £82.97 for the phone and broadband service for the duration of the contract period. The £46 was credited to your account when you notified BT that you had returned the BT Home Hub. After you called on 12 June to dispute the remaining bill, your account was credited with a further £48 as a goodwill gesture. You opted for the International Freedom plan in addition to Option 1, which provides discounted, not free, calls to Mexico. However, your calls to Mexico pre-date your subscription to this service, so there was no discount on these. BT apologises for not responding to your letter.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at:

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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