Santander fined £12.4m for unsuitable financial advice
Wednesday, March 26th, 2014 By
The Financial Conduct Authority (FCA) has handed out one of its biggest ever retail banking fines to Santander, over its failure to give accurate and quality investment advice to some customers.
According to the FCA, the Spain-based bank did not take sufficient care in advising customers over investment risks and didn’t ensure that they were given clear and truthful information about products and services.
Furthermore, it failed to monitor the quality of investment advice given and ensure that new advisers were properly trained before dealing with customer inquiries.
The £12.8m fine is the largest ever given for a retail banking issue, and has been reduced from the initial £17m, as Santander UK agreed to settle the free at an early stage of the investigation.
The bank will contact affected customers and give a refund for sales that were sub-standard.
Tracey McDermott, director of enforcement and financial crime, said, “Customers trusted Santander to help them manage their money wisely, but it failed to live up to that responsibility. If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need. Santander let its customers down badly.”
Head of UK banking at Santander Steve Pateman commented, “We regret that elements of Santander UK’s historic branch-based investment sales processes did not meet the required regulatory standards and apologise to any customers who have concerns”.
Santander already came under scrutiny in 2012, when the now-defunct Financial Services Authority (FSA) reported over a mystery shopping exercise. Subsequently, the bank stopped giving financial advice in branches.
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