Santander fined £1.5m
Santander, who have been doing a fine job of winding everyone up over the last year or so, have now been fined £1.5m by the City regulator for failing to tell customers that stock market-linked bonds they were buying weren't actually covered by the Financial Services Compensation Scheme (FSCS) if the bank went belly-up.
That flies in the face of the fact that, until January 2010, Santander were telling investors that their Guaranteed Capital Plus and Guaranteed Growth plans "may be covered by the Financial Services Compensation Scheme", and referred them to the FCSC website for further details.
The truth of the matter is that cover under the scheme was limited and, should the bank collapse, investors wouldn't have been able to get their money back at all. The best they could hope for is compensation. Hardly guaranteed.
The Financial Services Authority (FSA) said customers queried the cover towards the end of 2008, prompted by the collapse of Icelandic bank Icesave. However, it took Santander 'til June 2009 to conclude cover was as claimed and, furthermore, it took a further six months to clarify the position in literature to investors. During that time, sales continued, with the bank taking around £2.7bn from customers.
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."
Santander said it was "disappointed with the outcome" and had registered its opposition to the FSA's findings. In a statement it said: "The FSA's decision notice does point out 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. However, in order to conclude a lengthy investigation process, Santander has decided, in the circumstances, that we will not challenge further the decision, nor the fine."