Published at 16:09, Tuesday, 07 August 2012

REPRESENTATIVES of the Federation of Small Businesses have hit out at the news some of the UK’s largest banks are to end their free business banking offers.

Santander announced at the end of last month it is writing to its 233,000 business customers to advise them their accounts will no longer be free and monthly fees of £7.50 are to be introduced later this year. Banking experts and forecasters predict other big banking groups will follow suit.

Santander argues the impending account changes mean customers will receive an improved service, including more business managers in local branches and a higher rate of interest, 0.25 per cent, will be paid on balances.

But Gary Lovatt, FSB regional chairman for Cumbria, said increasing costs for business customers was “not acceptable”.

He said: “Customers were signed up to this service on the basis of the product being free and specifically free forever.

“Small businesses transferred their bank accounts in good faith but have now had the rug pulled out from beneath them. While £7.50 per month may not seem like a significant amount, we are concerned this will just be the tip of the iceberg.

“Santander is saying free business banking is no longer viable but we offer FSB members free business banking and can prove this is simply not the case.

“Banks driving up costs for small businesses in the current climate is really not acceptable and we would urge affected businesses across Cumbria to vote with their feet.”

Santander continues to offer a free banking account to new start-ups, but usually only for 12 months.

A spokeswoman for Santander said: “Our business customers have told us they require more.

“The majority of our customers will see this account is highly competitive and gives them the all-round service they demand so they can concentrate on growing their businesses.

“It is not viable to offer them more, for free.”

Published by http://www.nwemail.co.uk