When Santander announced two months ago that more than 200,000 small business customers who had been promised "free banking for ever" would henceforth have to pay monthly charges for their accounts, it must have anticipated something of a backlash.
But it clearly hadn't expected so many customers to complain – last week, it was forced to make an about-turn. Existing customers on a fee-free deal will not after all be forced to pay, Santander now says.
This is an episode from which it is worth drawing some lessons. The first of these is that certain small businesses may have more clout than they realise when dealing with their banks.
One factor that seems to have persuaded Santander to change tack is that almost all the customers concerned run very small businesses. As such, they are covered by the Financial Ombudsman Service, the independent agency that investigates consumer complaints about the financial services sector and has the power to order companies to do things differently.
Many small businesses do not realise the Ombudsman covers them, but European law requires this. Small businesses with an annual turnover of less than €2m (£1.6m) and fewer than 10 employees are entitled to take their complaints to the Ombudsman in exactly the same way as consumers.
All small businesses are, of course, entitled to use the courts to take on banks and other firms they believe have treated them unfairly. But doing so is daunting and potentially costly. The Ombudsman, by contrast, is free and relatively painless. And even the prospect of complaints to the service, which cost the banks money, can persuade a change of heart.
Certainly, it is interesting to note how quickly Santander has changed its mind on this issue compared to, say, those banks which have been fighting a lengthy rearguard action over accusations of mis-selling of interest rate derivatives.
In that case, most of the small businesses that were sold these products alongside loans were too large to complain the Ombudsman. That's one reason why it took so long for the banks to accept there was a problem, or for regulators to take an interest.
In an economic environment where policymakers are keen to encourage the growth of small businesses, it might be an idea to offer them greater regulatory protection by extending the reach of the Financial Ombudsman Service. Some campaigners claim that interest rate swap mis-selling has forced otherwise viable small businesses to shut up shop – that might have been prevented had these firms had access to the Ombudsman.
Hydrogen hires a big-hitter
Look out for today's interim results from the recruitment company Hydrogen, which will include news of the recruitment of Stephen Puckett as a non-executive director.
It is a decent hire – Mr Puckett spent 11 years as finance director at Michael Page, one of the biggest players in the recruitment sector, stepping down at the end of last year.
Today's figures should be in line with consensus forecasts for modest growth.
Crackdown 'puts funding at risk'
The Financial Services Authority is under attack amid proposals for new regulation that could damage an important source of funding for growing businesses.
The Association of Investment Companies (AIC) says the FSA's draft rules of a ban on the promotion of unregulated collective investment schemes to retail investors will prevent venture capital trusts (VCTs) raising money from anyone other than sophisticated and high net worth individuals.
Ian Sayers, director general of the AIC, said VCTs should not be included in the crackdown.
"VCTs are listed investment companies overseen by an independent board and regulated by the listing rules and company law," he said. "We will be calling on the FSA to exclude them from the proposals in the same way that investment trusts have been."
Small businessman of the week: Anthony Karibian, founder, bOnline
I've always worked in the SME sector and specifically at the micro-end, with companies that typically have fewer than 10 employees – this is a market where you're dealing with the owner of the business rather than someone in middle management, and they're price-sensitive and demanding.
I set up my first business, Euroffice, in 1999, selling office supplies online. We launched very cheaply, alongside rivals that raised huge sums and then went bust, leaving us as the market leader. It was a good lesson – you need to raise enough money to survive but not so much that you can just throw good money after bad when you encounter a problem.
Next, I launched XLN, a telecoms business, but by the time I sold out of both companies in 2010, I recognised there was a gap in the market for providing website services to micro SMEs. We launched four months ago with a platform that sits on Google Apps and is therefore low-cost and highly automated. There are no upfront fees – prices start at £8.95 a month.
These businesses understand the importance of being online, but they've had a lousy service, often paying hundreds of pounds only to make very little progress.