Santander hit with £1.5m fine

Tuesday 21st February 2012

Santander has been fined £1.5m by the FSA for not telling investors in complex structured products whether they would be entitled to compensation should the products fail.

The bank did not tell consumers who invested in structured products to what extent they would be covered by the Financial Services Compensation Scheme (FSCS) until January 2010, despite queries about the cover as early as 2008.

Over this period Santander sold £2.7bn of structured products, including £1.2bn worth after June 2009, when it had concluded that two products, Guaranteed Capital Plus and Guaranteed Growth plan, would have only limited FSCS cover.

Customers were not informed of the limits of the cover until January 2010.

The bank has acknowledged that it should have changed its product literature.

Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: “When firms provide customers with literature about products, the information has to be correct and unambiguous. After all, it is there to help people make informed decisions about whether to invest.

“Considering that sales of these products took place between 2008 and 2009, a time of financial uncertainty, Santander should have moved more quickly to confirm under which circumstances FSCS cover would be available.”