Santander UK Plc · DRN-5665690

The complaint Miss W complains Santander UK Plc did not provide her with proper support and safeguarding as a vulnerable consumer in relation to her current account and overdraft with them. What happened I issued my provisional findings to both parties setting out why I did not think Miss W’s complaint should be upheld, and invited both parties to provide any further submissions in reply to my provisional decision. The background to this complaint was set out in my provisional decision together with my provisional findings, which are included below and now form part of this final decision. Background Miss W opened a current account with Santander in February 2021 and from May 2021 until July 2022 used the account to gamble excessively. In October 2022 Miss W closed the account. During the time Miss W held the account she regularly increased and decreased her overdraft limit which at its lowest was £50 and its highest £1,250. Miss W says that, despite her income being solely derived from benefits for herself and her children, at no point did Santander step in to offer her support given the unusual behaviour on her account in terms of the total credits and debits being made, and the multiple transactions sometimes totalling thousands of pounds to the same gambling institution in a short space of time. Instead Miss W says she was approved an overdraft which she was able to use for gambling and the lack of monitoring of her account meant she found herself in thousands of pounds of debt. Our Investigator said Santander ought to have looked more closely at Miss W’s account in April 2022 following Miss W’s frequent requests to change the overdraft limit, rather than being prompted to do so by any particular transactions or spending behaviour. So they said it would have been apparent to Santander from April 2022 that Miss W was not in a position to sustainably manage the overdraft and they could have – at that point - offered her support in relation to her gambling. To settle things the Investigator proposed Santander rework Miss W’s overdraft as if it had been removed from April 2022 and said that Santander should also pay Miss W £250 to recognise the upset caused to her by Santander not stepping in sooner. Santander disagreed as there was nothing about Miss W’s account management to have prompted their awareness of Miss W’s gambling or vulnerability and noted that Miss W had not reached out to them for support. Santander also disagreed that the overdraft had been lent irresponsibly given Miss W’s level of usage and the income she had declared showed it was affordable, and removing the overdraft from April 2022 would have caused Miss W more problems at that time given she was using it.

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Miss W accepted the Investigator’s findings in so far as there was some acknowledgement Santander had fallen short in their responsibilities, but she said the compensation of £250 did not reflect the loss and impact she had experienced due to the lack of support from Santander. Provisional Findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. To decide a fair and reasonable resolution to a complaint I am required to take into account any relevant law and regulations; regulators’ rules, guidance and standards; codes of practice and (where appropriate) what is considered to have been good industry practice at the relevant time. It may also help to explain I do not have the authority to interfere with a firm’s processes, systems or controls or to fine or punish a firm – those are considerations for the financial regulator, the Financial Conduct Authority (FCA). Having reviewed this case, I am minded to reach a different outcome to the Investigator as I do not think Miss W’s complaint should be upheld for reasons I’ll explain below. The parties should also note while I’ve considered all the available submissions I have not responded to each individual point raised, rather I have focused on what I consider relevant to reaching a fair and reasonable resolution in this matter. It is apparent Miss W’s primary reason for this complaint rests on her concerns that Santander missed opportunities to step in and provide her with support. Miss W says that as Santander failed her in this way she was instead enabled to gamble excessively so that she has now found herself with large debts to repay and has been caused much upset due to the position she has now found herself in. I’ve first considered Miss W’s submissions that Santander failed to recognise and treat her appropriately as a vulnerable customer. Miss W has shared with our service (and with Santander when she first opened her account) that her income is derived from various benefits for herself and her two children. The FCA recognises someone as vulnerable who, due to their personal circumstances, is especially susceptible to harm. Vulnerability can be complex and driven by different things, but it is also noted by the FCA that not all customers with characteristics of vulnerability will be vulnerable, although they may be more likely to have additional or different needs. My intention here is not to diminish the difficulties Miss W manages in her day-to-day life. I recognise Miss W’s personal and financial circumstances present potential vulnerability and I’m aware Miss W would have declared the source of her income to Santander, but I’ve not seen anything to suggest Miss W requested or required any particular additional support to help her manage the account. And while Miss W’s income was sourced from benefits, it would be unfair to consider this an automatic reason to refuse Miss W access to particular services (such as an account or credit facility) or suggest there should be any sort of different treatment. It is therefore difficult for me to say Miss W’s potential vulnerability ought to have reasonably prompted Santander to do something different for Miss W such as monitor her account more closely as she suggests. I’ve next considered what Miss W has said about how she used her account and that she is

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unable to comprehend how her account behaviour did not alert any systems with Santander (most notably in terms of fraud and anti-money laundering) to look more closely at her account, which she says in turn would have led them to discover her gambling and offer her safeguarding and support to prevent her from financial harm. To support her point, Miss W has referenced the total sums going in and out of her account each month being at odds with her source of income; the multiple sums of transactions being paid to numerous gambling merchants; multiple payments to the same gambling merchant within a short space of time, and high sums being paid in one transaction to gambling merchants. Miss W is right when she says Santander have legal and regulatory obligations to prevent fraud, but it is at a firm’s discretion what those systems, processes and controls should be in order to meet those responsibilities. And given the nature of these fraud protective measures (typically driven by algorithms as opposed to human intervention), while I’ve noted Miss W’s wish to know the thresholds and triggers of Santander’s fraud protection framework, these would be commercially sensitive so it would be inappropriate to share anything of that nature here. I recognise Miss W’s motivation for wanting to know how Santander’s fraud systems, processes and controls work as it forms part of her argument that surely something within this framework would have prompted Santander to intervene on her account. I realise this will be frustrating for Miss W given there is no doubt that her gambling was excessive and sometimes the amounts leaving her account within a short space of time were significant, but the payments were authorised and there is no record of Miss W disputing any of these payments. Miss W managed her account in so far as she received money into it and covered her expenditure so as not to raise any concerns or suggest any signs of financial difficulty which might typically be highlighted through, for example, repeated returned direct debit payments, excessive use of an overdraft or repeated overdraft charges. As I’ve said, it is not for me to interfere with a firm’s processes, systems or controls and say what should or should not be picked up as unusual transactions or account behaviour. Santander’s automated system did not find anything to prompt closer inspection of Miss W’s account so there’s nothing to suggest here that Santander should have stepped in to take a closer look at Miss W’s account - so there’s not enough here for me to say Santander did something wrong. And while the gambling industry has guidance in place for organisations providing gambling services, Santander – as a credit provider – are answerable to legal and financial regulatory obligations and responsibilities. With this in mind there are no legal or regulatory obligations placed upon Santander for individual staff to monitor consumer’s statements on a ‘transaction-by-transaction’ basis or to monitor consumer’s accounts specifically for gambling transactions. So in the circumstances I think it would be unfair to say Santander should be so closely monitoring someone’s account as a general matter of course. Santander have shared that they have now implemented new procedures to recognise high levels of gambling on a customer’s account, but these were not in place while Miss W held her account with Santander so I think it would be unfair to apply this procedure retrospectively. In the circumstances, I’ve therefore not seen anything to persuade me that the sums and transactions passing through Miss W’s account ought to have prompted Santander to contact Miss W about her account.

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I’ve next considered Miss W’s overdraft. Our Investigator suggested Santander ought to have been prompted to look more closely at Miss W’s account in April 2022 following her frequent changes to the overdraft limit. The Investigator said it would then follow that a closer look would have brought to light Miss W’s gambling transactions and ought to have prompted some sort of action from Santander. However, for the reasons I will explain later on, I do not agree. When it comes to overdrafts, there are obligations and responsibilities on firms to monitor a customer’s overdraft for repeat usage in case there are signs of actual or potential financial difficulties. The policies, procedures and systems to carry out this monitoring and the frequency of such monitoring is noted to be at the firm’s discretion. General industry expectation would however be for a firm to at least monitor an individual’s overdraft on a 12-month cycle, assuming no other reason for prompting earlier intervention. Additional guidance about overdrafts was published by the FCA in September 2020 in light of the pandemic, which I think Miss W has referred to along with the FCA’s guidance for vulnerable consumers (which I considered earlier). While Miss W’s overdraft was not in place long enough for a review after 12 months, I’m mindful that Santander said their systems automatically reviewed their customer’s maximum overdraft limit on a monthly basis. I’ve therefore considered whether there was anything about Miss W’s usage of her overdraft to have suggested she was financially struggling. From what I’ve reviewed, Miss W’s overdraft usage was not excessive as Miss W did not remain in her overdraft for long periods of time or regularly exceed the overdraft limit. Therefore outwardly it appeared Miss W used her overdraft as intended, as a short-term lending facility. Because of this I think it fair to say there was nothing in terms of how Miss W was using her overdraft that could reasonably suggest to Santander she was experiencing any financial problems prompting a closer look at her account. And I don’t find that the frequency in changing the overdraft limit ought to have prompted Santander to examine Miss W’s account more closely either. While it is possible to see the overdraft limit was increased and decreased fairly frequently during the time Miss W had the overdraft, I’m not persuaded this would be unusual enough to be considered a trigger for Santander to have questioned what was happening on Miss W’s account. The ability to increase and decrease the overdraft limit was a feature of Miss W’s account and arguably Miss W was exercising her right under the terms of the account to make these requests. As already noted above, Miss W was not heavily using the overdraft and on balance I’m not persuaded these requests were enough to have reasonably warranted Santander making a closer inspection of the account. Taking this all into account, I’ve not found anything about how Miss W used the overdraft, including how she changed the overdraft limit, that should have alerted Santander to look at the account in more detail or contact Miss W about it. This leads me next to consider Miss W’s lesser complaint point that, given her gambling, Santander should not have allowed her to increase her overdraft. As a lender, Santander does have an obligation to lend responsibly and so I’ve considered

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that obligation in Miss W’s case by firstly considering whether Santander carried out reasonable and proportionate checks to satisfy itself their customer would be able to repay any credit in a sustainable way and if so, whether that lending decision was fair. And if reasonable and proportionate checks were not carried out, what would such checks have shown? And lastly, whether Santander acted unfairly or unreasonably in some other way. Santander have explained an automated system decides a customer’s overdraft limit based on several factors including, amongst other things, a customer’s account turnover, their credit file and once the overdraft is up and running the customer’s overdraft usage. So there is no manual (human) review. The maximum overdraft limit is set (and reviewed each month) so a customer can then apply for an increase or decrease within that limit. When Miss W first opened the current account with Santander she did not apply for an overdraft facility, but did so a short few months later. Miss W’s usage of the overdraft after this was kept within the overdraft limits and for the most part Miss W did not use it. For context, Santander have confirmed the total interest applied to the overdraft during the time Miss W held the account was £78.78. Having reviewed the various overdraft limit changes it is apparent Miss W’s overdraft limit was at its highest in March and April 2022 when it fluctuated between £1,050 and £1,250. Outside of this the limit fluctuated between £50 and £600. Given the overdraft limits involved and Miss W’s income from her benefits, which in the three months prior to April 2022 averaged getting close to £3,000 per month, I think Santander’s monthly reviews were reasonable and proportionate in this case and the provision of the overdraft was not unfair. I recognise Miss W has said she borrowed money from doorstep lenders and individuals to keep her account in order, but Santander have said apart from the overdraft there was no other unsecured lending showing while they held Miss W’s account, and Miss W did not use the overdraft excessively or repeatedly to suggest she would not be able to repay the borrowing within a reasonable period. So I’ve not seen anything to persuade me that Santander acted irresponsibly in providing Miss W with the overdraft. I’ve also considered if Santander acted unfairly or unreasonably in any other way, notably if there was anything to suggest the lending relationship may have been unfair under Section 140A of the Consumer Credit Act 1974. For the reasons I’ve explained I don’t think Santander lent irresponsibly here to Miss W or otherwise treated her unfairly, so I’ve not seen anything to suggest Section 140A or anything else would, given this case, lead to a different outcome about Santander’s decision to provide Miss W with her overdraft. To summarise, based on my review of Miss W’s case I have not been minded to find in her favour. I am aware this will come as a great disappointment to Miss W given the gambling sums she has been seeking to recoup are not insignificant, and having borrowed money to manage her situation she is still repaying a sizeable debt. I assure Miss W I have considered everything she has shared with us in terms of the reasons for her gambling and how she has felt about the situation she has found herself in, and I do not underestimate the effort it has taken for Miss W to work on changing her circumstances. I have considered Miss W’s submissions that if there had been some sort of intervention from Santander the embarrassment of what she was doing with the money would have mitigated her financial situation by causing her to reign in her gambling. I recognise this is not an easy thing for Miss W to have shared. But even if I were to have found there was something that ought to have provoked

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Santander to examine Miss W’s account more closely and get in contact with her, I would find it difficult to be persuaded that Miss W would not have continued to gamble. It also would not have been possible to place any block on Miss W’s card before March 2022 (due to the card scheme provider for Miss W’s card) and any such block could still be removed by a customer after 48 hours. However, as I have not upheld Miss W’s complaint I have not needed to consider in any detail what more likely than not would have happened if there was anything to reasonably suggest Santander should have become aware of Miss W’s gambling transactions while she held the account. For me to find that a consumer should be awarded redress in a case I must fairly and reasonably reach a conclusion that the business whom the complaint is against has done something wrong or acted unfairly. My review of Miss W’s case has not persuaded me that in the circumstances Santander did anything wrong or acted unfairly towards her in this matter. Therefore I propose no award should be paid to Miss W. Responses to my provisional decision Santander replied to accept my provisional decision and offered no further submissions for me to consider. Miss W did not respond to my provisional decision by the agreed deadline or provide any further evidence or submissions for me to consider. 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. The deadline in my provisional decision has now passed. As Miss W did not present any new evidence or submissions for me to consider before that date and as Santander accepted my provisional decision I therefore see no reason to depart from my provisional findings above. That is, I’ve found no reason for Santander to have intervened with how Miss W was managing her account, so I don’t think Santander have done anything wrong in that regard and I don’t think Santander acted irresponsibly by providing Miss W with the overdraft. Overall, in the circumstances, I’ve not found that Santander did anything wrong or treated Miss W unfairly in this matter. My final decision For the reasons above, my final decision is that Miss W’s complaint is not upheld. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss W to accept or reject my decision before 31 July 2025. Kristina Mathews Ombudsman

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