Santander UK Plc · DRN-2352912

The complaint A company which I’ll refer to as “C” complains that it was unable to apply for a loan under the Coronavirus Business Interruption Loan Scheme from Santander UK Plc. Mr S, who is a director of C, brings the complaint on C’s behalf. What happened C was looking to apply for a loan under the Coronavirus Business Interruption Loan (CBIL) Scheme from Santander in March. But it was unable to submit an application as the bank’s system would only accept applications from companies with up to two directors – and C has three. C raised a complaint. But while Santander apologised for the issue, it said the application for a loan under the CBIL Scheme could only cater to businesses with two (or fewer) directors. After further attempts, C complained again – but the bank said it still couldn’t process C’s application, and was awaiting a fix for the issue. C has now obtained a loan from a different lender, under the Bounce Back Loan (BBL) Scheme. But Mr S remains unhappy with how Santander handled things. He says the bank’s actions were deliberate, discriminatory and intended to hinder C’s survival. And he thinks it should’ve done more to put forward an alternative solution. After the complaint was referred to us, Santander accepted that it could’ve handled things better. In particular, it said that it could’ve communicated things more clearly – and confirmed that the reason it couldn’t proceed with C’s application was because of its own processes, rather than anything to do with the CBIL Scheme itself. But it said the limitations of its systems were an unfortunate consequence of needing to develop and launch the application process in a very short period of time. To put things right, Santander has apologised to C and offered £350 to C. It has also put in place a Business Banking Manager for C. When our investigator reviewed C’s complaint, she thought the bank’s offer was fair. She didn’t think the bank’s actions had been deliberate, though she could see that they’d had an adverse impact on C. She thought the £350 already offered was fair compensation for the inconvenience C had been put to in trying to get the application moving and ultimately having to look somewhere else. Mr S didn’t think Santander’s offer was fair. He didn’t think the bank’s explanation was satisfactory and still thought it should’ve done more to help. He didn’t think the £350 offered was a fair reflection of the stress and inconvenience caused. So with no resolution, C’s complaint was passed to me to decide. What I’ve decided – and why

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I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’ve reached largely the same conclusions as our investigator and for much the same reasons. I’ll explain why. It is accepted that, due to the limitations of Santander’s systems, C couldn’t apply for a loan under the CBIL Scheme because it had more than two directors. That clearly had a detrimental impact on C and Mr S is understandably concerned as to why it was the case. Santander would clearly ordinarily be able to process loans for companies with three (or more) directors. We’ve asked Santander to explain how this problem arose. In short, it says that it was the result of the limited time it had to develop and launch the product. To be able to offer loans under the CBIL Scheme, it had relied on an existing lending platform which unfortunately limited applications to businesses with no more than two directors. I have no reason to doubt what the bank has told us in this regard. So while I recognise Mr S’s concern, I don’t think its actions were deliberate. And I think it’s put forward an appropriate explanation for what happened. It’s also worth noting that Santander wasn’t obliged to offer lending under the CBIL Scheme – and it had discretion about who it lent to, and on what terms. So although its lending platform was imperfect, it was under no obligation to develop a new one. As I’ve said, I appreciate that this left C in a difficult position, and through no fault of its own. The fact the problem arose in the first place and the lack of some kind of workaround were both far from ideal. But given the limitations of the bank’s systems, and in view of the unprecedented circumstances that it was working under while in the early stages of rolling out the CBIL Scheme as quickly and effectively as possible, I don’t think there’s much more it could’ve done to resolve the situation. The CBIL Scheme was only launched on 23 March. C first complained about these issues two days later, and the bank explained why it couldn’t proceed with C’s application in its response on the same day. So it looked into things and confirmed the position swiftly. It dealt with the subsequent complaint – raised about a week later – quickly, and proactively got in touch with C to alert it to the launch of the Bounce Back Loan Scheme. And while I recognise this was far from ideal, C was also free to approach other lenders for a loan under the CBIL Scheme or for another type of borrowing altogether. Nevertheless, C was clearly put to some trouble in its failed attempt to apply for a loan under the CBIL Scheme from Santander. I think it was reasonable for Mr S and his fellow director to follow up the rejected application and try to find a solution. But I think the £350 that Santander has already offered is fair compensation for this. I know that Mr S doesn’t feel this enough. And I appreciate this matter has been stressful for him, and his fellow directors. But as our investigator has explained, we can’t award compensation to the directors for any personal upset they’ve suffered. The complaint is brought by C – so we can only consider the impact that the bank’s errors had on it, rather than on the directors. And as C is a limited company, it can’t suffer distress. Mr S has queried how we determine fair compensation. So I should explain that we look at the overall impact that the errors had on the complainant, rather than assigning amounts to a particular type of error or unit of time. We have a general approach to the level of the awards that we make and more information about this can be found on our website. For the reasons I’ve explained, I think that Santander’s offer of £350 is consistent with this approach and is in line with what I would’ve directed, had it not already been proposed.

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My final decision Santander UK Plc has already made an offer to pay C compensation of £350 to settle the complaint and I think this offer is fair in all the circumstances. So my decision is that Santander UK Plc must pay C £350. Under the rules of the Financial Ombudsman Service, I’m required to ask C to accept or reject my decision before 8 February 2021. Ben Jennings Ombudsman

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