Santander UK Plc · DRN-6080113

The complaint Mr B complains that Santander UK Plc (Santander) acted unfairly when it blocked his accounts and asked him to provide information. Mr B is also unhappy about how Santander communicated with him about the information it requested. What happened The details of this complaint are well known to both parties, so I won’t repeat them again here. After reviewing the evidence, I came to a different conclusion to the investigator and decided to partly uphold Mr B’s complaint I set out my conclusion in a provisional decision which said the following: Provisional Decision I’m very aware that I’ve summarised the events in this complaint in far less detail than the parties and I’ve done so using my own words. No discourtesy is intended by me in taking this approach. Instead, I’ve focused on what I think are the key issues here. Our rules allow me to do this. This simply reflects the informal nature of our service as a free alternative to the courts. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it. I’m satisfied I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. But I want to assure Mr B that I have read all his submissions. I’ve decided to uphold this complaint in part. I’ll explain why: • Santander has legal and regulatory obligations to ensure that it has sufficient knowledge of its customers, which means the bank may need to check from time to time that the information it holds for its customers is correct. It is a commercial decision which Santander can make on how often it undertakes these checks and what information (within reason) it needs to comply with its obligations. That sometimes means as in this case that a bank chooses to conduct a ‘Know You Customer’ (KYC) review. • If a customer doesn’t provide this information, the bank may be put in a position whereby it may break a law, regulation, code or duty and therefore it is able to take further action to mitigate this, such as restricting and ultimately closing an account. I recognise that Mr B is unhappy about some of the information that he was asked to clarify and provide, such as his income and bank statements. However. I’ve seen Santander’s records and the reason that it requested the information, and I’m satisfied that the bank acted reasonably here. And ultimately if Mr B didn’t want to provide the information requested by the bank he could have chosen to open an account elsewhere. • I appreciate that Mr B felt the information that Santander requested was intrusive and unnecessary. Mr B said Santander was simply going on a fishing trip and conducting unwarranted investigations into his activities. But the information Santander was asking Mr B to provide is standard information that banks and other financial businesses are required to have in order to adhere to their KYC responsibilities. It’s not in my remit to

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determine what questions Santander should ask its customers to ensure it adheres to these responsibilities. There’s no fixed set of questions or period between each customer’s update request, and they are usually done to reflect the changes in the economy, technology or tactics employed by criminals to commit financial crime. • Santander is required to have up to date information about its account holders, including details of their source of wealth, in order to comply with its legal and regulatory obligations. So, whilst I can appreciate Mr B’s point of view about the necessity of the information and his concerns about the information Santander requested, I can’t reasonably say that Santander was acting unfairly or unreasonably in asking Mr B for the information that it did. • Mr B told us that Santander sent him threatening letters that it would restrict his account if he didn’t provide the information. And harassed him by sending more than one letter. I’ve seen copies of the letters Santander sent to Mr B on 5 and 12 June 2024 and I’m not persuaded that’s the case. As the bank wasn’t satisfied it could meet its regulatory obligations because it hadn’t received the information it needed from Mr B it sent firmly worded warnings that it would restrict Mr B’s account if he didn’t provide the requested information, which was in line with its terms and conditions. • I think it is reasonable that Santander wanted to clarify that the information it held for Mr B was correct and I don’t think the letters were threatening, but factual in terms of the consequences of this information not being provided. I also don’t think it was unfair for Santander to restrict access to Mr B’s account as I’ve seen that it told Mr B in writing that it would take this action if Mr B didn’t provide what was requested. So, I can’t conclude that Santander treated Mr B unfairly when it decided to review his accounts. • Mr B didn’t contact Santander to provide information until 21 June 2024. During the phone calls Mr B provided details of his income but said he wasn’t happy to provide banks statements. Following this on 1 July 2204 Santander blocked Mr B’s personal accounts. As I’ve said above, Santander are obliged under regulation to conduct ongoing KYC checks to protect accounts from identifying theft, fraud, and financial crime. So, if they don’t receive the necessary information that they request to allay those risks, I do not consider suspending Mr B’s account is a disproportionate measure for Santander to take. • Santander removed the block from Mr B’s account on 1 July 2024, after he provided the bank with the outstanding information. I know Mr B was worried about the impact the block had on him being able to meet his financial commitments, but I’ve not seen any evidence that there was any interruption to Mr B regular bills. So, I won’t be asking Santander to do anything more to resolve this aspect of Mr B’s complaint. • Mr B has said he is concerned about the expertise and experience of the staff involved in the KYC exercise concerning his account. In particular their knowledge of Anti-Money Laundering regulation and how it applies to him. Mr B has based his concern on the staff he spoke to on the phone, being unable to properly answer his questions about why the bank decided to complete a KYC review of his account. And says how he uses his account shouldn’t give Santander any cause for concern. I want to make it clear that whilst I understand the point Mr B makes, we’re not the regulator of financial businesses and we don’t police their internal processes or how they operate generally. It’s not for me to tell the bank who it should employ or how it should train staff. If Mr B has concerns about the level of skill of the bank’s compliance staff and its processes, he should direct this to the regulator, The Financial Conduct Authority.

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• This being said I am not satisfied that the service Mr B received when he contacted Santander on 21 June 2024 was what he could have expected. I have listened to the available calls Mr B had with Santander when Mr B rang the bank to find out why he’d received the letters dated 5 and 12 June 2024 referring to his closed business account and personal account. Having done so, I think the service Mr B provided during this call fell below what Mr B could have expected. I say this because during the call, the advisor sighed, didn’t listen to what Mr B was saying and misinterpreted what Mr B told them – in particular what Mr B said about his occupational pension. The advisor also didn’t clearly explain to Mr B why Santander needed the information it had requested from him, which clearly frustrated Mr B. And meant Mr B had to repeat himself and spend longer than needed on the phone call. So, I am satisfied that Mr B was caused some inconvenience and upset because of the way the call was managed by Santander. • Santander accepts that the call didn’t go well. And that the advisor Mr B spoke to was unprofessional. To put things right Santander apologised to Mr B and provided feedback to the advisor. But I don’t think this goes far enough to put things right. I don’t feel this takes sufficient consideration of the worry, frustration and inconvenience Mr B experienced as a result of how Santander managed his call on 21 June 2024. To put things right I think Santander should pay Mr B an additional £100 compensation. • I can also see that when Santander wrote to Mr B on 12 June 2024, one of the letters was addressed to Mr B’s business – but Mr B had asked Santander to close his business account in 2022. Mr B asked the advisor during the call on 21 June 2024, for an explanation. The advisor didn’t provide any meaningful explanation for this or offer an apology. It’s clear from what Mr B said in the call that receiving the letter added to his confusion abbot what he needed to provide and for what account. think Santander could have done more to explain things clearly here and had it done so I think it’s more likely than not that this would have allayed Mr B’s concerns and upset. To put things right I think Santander should pay Mr B £100. As I’ve explained above, I don’t think Santander has done anything wrong in reviewing and blocking Mr B’s account in the way it did. I note Mr B says these actions caused him distress, and inconvenience. But as I don’t think Santander did anything wrong here, I won’t be asking it to compensate Mr B for this. However, I do think Santander communicated poorly and should have done more to explain things to reduce the distress and inconvenience Mr B was caused, and which could have been avoided. Having carefully considered this, and what impact this had on Mr B, I’m satisfied a total award of £200 is fair compensation. In reaching this conclusion I should explain that our awards are designed to reflect the actual loss, trouble, and upset caused to the consumer by something a financial business did wrong. We are not here to punish financial businesses. Nor can we award compensation as a means of punishing a business for a consumer bringing their complaint to this service. In summary, Santander is allowed to make commercial decisions about how it meets its relevant obligations, so I can’t reasonably question how it undertakes its reviews or challenge the information it says it needs to meet its legal and regulatory obligations. However, I think Santander’s communication wasn’t reasonable and it didn’t teat Mr B fairly in its communications. To put things right Santander, I concluded that Santander should pay Mr B £200 compensation.

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Santander agreed with my provisional decision. It said whilst it appreciated Mr B’s commentary in terms of its review process however as it has advised previously these regulatory checks were within the FCA guidelines to complete and to keep the customer’s account and Santander secure. Mr B disagreed. In summary he said: • Santander conducted overzealous monitoring of his accounts which has been intrusive, unlawful and outrageous. • Santander’s review of his accounts lacked merit for an AML investigation and amounted to data harvesting, snooping and strong arming a long-standing customer to provide information it shouldn’t have requested. • He is a compliance specialist, experienced and well versed in all AML legislation and acceptable business practices. Santander cannot apply a blanket approach to all customers. • He will be making a report to The Financial Conduct Authority regarding Santander’s practices. • The amount of compensation I’ve directed Santander to pay Mr B for its poor service isn’t enough. He estimates his losses to be around £7,000 based on his hourly rate of £50 per hour – the letters/emails he wrote, the time taken for our service to look into his complaint and phone calls he has had to make to try and get things resolved. Now both sides have had an opportunity to comment I can go ahead and issue my final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr B has made a number of quite detailed submissions and also sought answers to his questions about the reasons for Santander’s review of his accounts. I’ve considered all of these, but I don’t believe it’s necessary to address each and every point that Mr B has made in order to meet my statutory duty to determine his complaint. I’m required to do that with minimum formality, and so I’ll address the issues that I consider to be the most important. I do stress however that I’ve considered everything that Mr B and the bank have said before reaching my decision. I should also make it clear that I’ve seen a great deal of evidence, in particular information in relation to the reasons behind Santander’s review, I have considered all of this along with Mr B’s recent comments, documents and the arguments he has raised throughout the life of this complaint. I am not going to rehearse every argument here. But I will comment on Mr B’s response to my provisional decision. Firstly, I’d like to make clear that this service isn’t a regulatory body or Court of law and doesn’t operate as such. This means that it isn’t within my remit to decide whether Santander have acted in a non-regulatory way or unlawful way. Our service is an informal alternative to the courts. And I can’t make a finding as to whether the law has been broken, and I don’t need to in order to decide this complaint.

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I believe it’s also important to explain that it’s not the role of this service to supervise, regulate or impose fines on any business. It’s also not our role to ask a business to alter its procedures or enforce changes to policies. That’s the role of the regulator, The Financial Conduct Authority. My remit here is to decide whether I think Santander acted fairly and reasonably when applying those policies and procedures in the individual circumstances of Mr B’s complaint. The central issue which I need decide if whether or not Santander acted fairly when it decided to review Mr B’s accounts and asked him to provide information. I’ve reconsidered all the evidence and the timeline of events, and I still find Santander’s actions to be reasonable. The evidence provided by Santander shows that a detailed review of the accounts took place, and Santander considered all the relevant evidence it had access too, including the information it gathered from Mr B. In order to meet its legal and regulatory obligations Santander will have clear guidance and processes in place, and in light of this I can understand why Santander completed a review of Mr B’s accounts – but I do understand Mr B will continue to disagree Mr B says Santander should not have asked him for bank statements relating to other bank accounts. There is no one prescriptive way a business should carry out a proof of entitlement check. A range of factors needs to be considered, depending on the individual circumstances. It is not my role to decide what evidence should meet Santander’s requirements. However, I have considered the review and requests from Santander, and I consider them to be proportionate and in keeping with general industry practice. Mr B has also raised general points about how the experience and effectiveness of its staff and what he sees as a misuse of AML regulation. It is the role of the Financial Ombudsman Service to resolve individual complaints and to award redress where appropriate. We do not perform the role of the industry regulator, and it is not our role to comment on how businesses conduct their operations. That’s the role of the Financial Conduct Authority (FCA). For these reasons it wouldn’t be appropriate for me to comment on whether the system is fit for purpose and the effectiveness of the FCA. M B is seeking more compensation - he wants to be compensated at his hourly rate. I should explain that we don’t usually award compensation on the basis of a complainant’s usual business or professional hourly rate. That’s not because we think a complainant’s time has no value. But basing compensation on a person’s business or professional hourly rate could suggest one-person free time is worth more than another person’s free time. And it might not reflect the true impact of the error on the complainant. Mr B can be paid for his professional or business expertise at an hourly rate. But Mr B wasn’t providing a business or professional service to Santander. And he hasn’t provided any evidence that contacting this service or Santander meant he was unable to carry out his usual work. In conclusion, I see no reason to depart from my provisional findings. I remain of the view that this complaint should not be upheld for the reasons set out in my provisional decision, which are repeated above and form part of this decision. On this basis I think it would be fair and reasonable to ask Santander to pay Mr B £200 compensation for its poor service in how it communicated with Mr B. I won’t ask it to do anything further here. Given how strongly Mr B feels about what happened he may want to pursue the matter further through other routes. But my decision brings to an end what we – in trying to resolve

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his dispute with Santander informally – can do for him. I’m sorry if this disappoints Mr B. My final decision For the reasons I have explained, my final decision is that I uphold Mr B’s complaint in part. To put things right Santander UK Plc should pay Mr B £200 for its poor service in relation to this matter. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 27 April 2026. Sharon Kerrison Ombudsman

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