Santander fined £1.5m over structured products
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The Financial Services Authority (FSA) has fined Santander £1.5m after it took more than a year to clarify under which circumstances its structured products would be covered by the Financial Services Compensation Scheme (FSCS).
According to the regulator, customers began to query cover towards the end of 2008, but were not informed until January 2010, when the bank clarified its position.
The FSA claims £2.7 billion worth of structured products were sold during the period: “£1.2 billion after June 2009 when it had concluded the circumstances in which its two products, Guaranteed Capital Plus and the Guaranteed Growth Plan, would be covered by the FSCS were limited”.
According to the FSA, the bank has acknowledged it could have changed product material and training materials “more quickly”.
Santander acknowledges that it could have changed its product literature and training materials more quickly to reflect the FSCS position accurately. The fact that it allowed sales to continue with unclear Key Facts literature contributed to the seriousness of the breaches. (article continues below)
Tracey McDermott, acting director of enforcement and financial crime at the FSA, says: “The extent of FSCS cover is important to customers, and firms must be clear about this in their Key Facts documents.”
She adds: “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 FSA says it has not made any findings that these products were sold to customers for whom they were not suitable adding that investors in these products have not suffered “any financial loss as a result of Santander’s failings”.
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