Following a long-running social media campaign by complainants, Santander has bowed to business client pressure and agreed to let existing customers keep their fee-free accounts.
The dispute began in 2011, when Santander took the decision to stop offering a business banking account with a "fee-free forever" pledge.
The product was a legacy hangover from one offered by Abbey and Alliance & Leicester, which Santander acquired in 2004 and 2008 respectively.
Letters were sent out to customers with the Abbey and Alliance & Leicester products earlier this year, informing them that a new business account had been developed by Santander, which offered a number of added extras, including:
- Free and unlimited cash withdrawals and standard transactions - an option not available for legacy Abbey accounts, which were subject to limitations for cheque deposits and cash/cheque withdrawals;
- Lower overdrafts rates on authorised overdrafts from 6.4-6.5% to 5.5% (variable)
- Improved rates of interest, rising from 0.01% for Abbey customers to 0.25% gross on all fixed fee account balances
- Access to their accounts through 10,500 UK Post Office branches, again, not previously available to Abbey customers.
Santander claimed these changes were introduced as a result of customer feedback, with existing clients asking for better services for their business account.
However, in return for these new services, customers would have to pay between £7.50 a month and £40 a month, a fee which rankled a significant number of existing customers.
More than 230 people took to a Facebook group 'Santander | Free banking forever, means forever...', set up by Lance French, which led to a stream of complaints being lodged with the FOS and a petition being set up.
One small business owner, Roy Robart, contacted The Huffington Post UK in dismay at the decision, saying: "I was never consulted for feedback on the account and neither were any of the other customers I've spoken to.
"We were perfectly happy with the arrangement (from Abbey) as it was. Their lawyers obviously didn't look at the advertising campaign distributed at the time, the phrase 'free banking forever' was plastered all over them."
The Huffington Post UK understands tens of disgruntled customers have submitted a claim to the Financial Ombudsman Service over the changes to the business account and many more complained directly to Santander.
And now the Huffington Post UK can reveal Santander has said it will allow existing customers who wish to retain the original fee-free account to do so.
A spokesman from Santander told HuffPostUK the new account had been developed in response to increasing customer demands for better interest rates, access and competitive overdrafts, and that it had to date been well received.
However, after listening to feedback from existing customers, it recognised a small number felt their businesses would not benefit from the changes.
“We will be retaining the fee-free option for existing customers. We will, of course, be happy to upgrade any customer who would like to make the most of the additional benefits offered by the fixed-fee account," they concluded.
Customers who have already issued complaints will soon receive a letter from Santander, explaining they can now keep their fee-free account.
Robart - who has been campaigning against the changes since his wife's dog minding agency Digs4Dogs received its notice from Santander about the account fee introduction - was thrilled to hear the news and said it was "a victory for group action via social media".