Santander fined over limited cover
Monday 20 February 2012
Related articles
Santander has been fined £1.5 million for failing to make clear to customers that some of its products had only limited cover under a compensation scheme.
The bank did not update literature for more than a year after customers started asking for clarification about whether two products were covered by the Financial Services Compensation Scheme (FSCS), which gives money back to investors when firms go under.
City watchdog the Financial Services Authority (FSA) said customers began asking for clarification at the end of 2008 but it did not update its literature and training materials until January 2010.
By this time, Santander had sold £2.7 billion under its Guaranteed Capital Plus and the Guaranteed Growth Plan investment schemes. And £1.2 billion of these sales came after it had concluded that cover was limited in June 2009.
Imposing a £1.5 million fine, Tracey McDermott, the FSA's acting director of enforcement and financial crime, 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."
The material about the two products said that the guaranteed investments depended on the continued solvency of Santander and its subsidiaries, but did not specifically state that they were not always covered by the FSCS.
The cover offered by the FSCS was more limited than would be typically given to deposit accounts, which sees investors refunded losses of up to £85,000 per person per bank.
This was because they were held by subsidiaries of Santander. The FSCS scheme would have only paid out in certain circumstances, such as if Santander was insolvent and investors had a claim against it and for negligent advice or for mis-selling.
A spokesman for Santander said: "Santander is disappointed with the outcome and has registered its opposition to the FSA's findings.
"The FSA's final notice acknowledges that there is no evidence that the products were sold to customers for whom they were not suitable; and that no customers have suffered a financial loss."
He added that Santander will not further challenge the decision, or the fine "in order to conclude a lengthy investigation process".
PA
- 1 Massive stage collapse before Radiohead concert kills one
- 2 News in pictures
- 3 Leveson threatened to quit after public attack by Gove
- 4 In pictures: The bewildering face of China
- 5 Osborne: The people’s damning verdict
- 6 Ed Miliband: 'Cameron is the last gasp of the old guard'
- 7 Savers start a 'jog' on Europe's banks as Greece votes
- 8 For whom the bell tolls: £20m 'Memo' project takes shape on Dorset's Jurassic coast
- 9 Still standing: George Galloway reveals why his staunchly Leftist outlook is still invariably right
- 10 Aung San Suu Kyi: A lesson in the value of kindness
- 1 Massive stage collapse before Radiohead concert kills one
- 2 Patrick Cockburn: Greece's day of reckoning dawns in a climate of anger and uncertainty
- 3 The Blagger's Guide To: The best (and worst) fathers
- 4 We just click: How Lego keeps building on its success
- 5 Revealed: Harry Potter is the Antichrist!
- 6 The Leveson Inquiry: We're in this together!
- 7 Osborne: The people’s damning verdict
- 8 David Flatman: Over and out
- 9 Frank Zimmerman and me: The truth about the troll who tormented Louise Mensch
- 10 Aung San Suu Kyi: A lesson in the value of kindness

Experience the Heineken Hub
Get free wi-fi and exclusive i content while you enjoy a tasty pint of Heineken at participating pubs.

Win a sumptuous three-night stay in Austria
Get away from it all in the fresh mountain air at the four-star Hotel Edelweiss & Gurgl.

Win a five-star foodie weekend to Liège
Spend two nights in gourmet heaven at a top hotel in the capital of French-speaking Belgium.

A home to be proud of with Halifax
Download the Halifax's brilliant, free new Home Finder app, and take all the pain out of finding your dream home

Playing a game-changing role during the Games
Cisco is providing the solutions for London 2012's complex IT needs.

Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.

Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Career Services
Day In a Page

Still standing: George Galloway

Daniel Radcliffe as drug-taking Beatnik poet

Objets czar: David Usborne’s collection of myriad objects

World's richest woman: Gina Rinehart

Comments