Santander unfair over PIN liability?

Santander may be breaking unfair contract terms regulations with its new security PIN requirement for account holders, lawyers have warned.

Santander UK Plc recently required all its UK account holders to take “reasonable steps” to keep their PIN unique to Santander. The bank may not accept liability if customers ignore this advice.

Writing in NLJ, barrister Stephen Mason and retired solicitor Nicholas Bohm argue that this requirement is so difficult to keep that its terms are unfair. 

“The inability of a human to remember a significant number of unique PINs is directly relevant to the reasonableness of a bank requiring each customer to have a unique PIN for each card (or even each bank),” Mason and Bohm say.

They suggest that both the Unfair Terms in Consumer Contracts Regulations 1999 and the proposed Directive on Payment Services could apply.

They argue that “considerable” research supports the view that people forget codes quickly and their memory diminishes over time, unless the code is meaningful in some way. Therefore, Santander are not only increasing the risk that customers will write down the PIN but also “throwing the risk onto the customer”.