FSA said that Santander did not reveal the compensation cover on Guaranteed Capital Plus and the Guaranteed Growth Plan structured products under the FSCS was limited. FSCS provides coverage including protection of investors’ investments and savings against failure of banks.
The circumstances were not revealed to existing customers, including new ones, until January 2010, while the information was sought for since 2008. Between the aforesaid period the bank disposed nearly £2.7bn of structured products, which includes £1.2bn after June 2009.
According to the watchdog, the fact that it allowed sales to continue with unclear Key Facts literature contributed to the seriousness of the breaches.
Santander accepted the allegations and said that it could have changed its product literature and training materials more quickly to reflect the FSCS position accurately.
Although no investors lost money as a result of the failings, the fine reflected Santander’s failure to meet proper standards of ‘skill, care and diligence’ as well as communication with clients.
FSA acting director of enforcement and financial crime Tracey McDermott said that the information on extent of FSCS cover was important to customers, and firms were responsible for clarifying about this in their Key Facts documents.
"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", McDermott added.
