Which? is calling for Santander to remove claims on its website that fixed-term investment customers’ capital is “safe” after the bank was fined £1.5m for failing to clarify Financial Services Compensation Scheme cover to structured products investors.
This week, the FSA fined Santander for failing to explain to customers the limitations in FSCS cover for its guaranteed capital plus product and its guaranteed growth plan.
Which? called on the regulator to take action against Santander after it conducted an undercover investigation in November and December 2009.
Santander’s fixed-term investments page on its website states customers “can rest assured that your capital will be safe”.
Which? chief executive Peter Vicary-Smith says: “We are pleased that the FSA has taken action but this fine is only a tiny fraction of the commission Santander gained from selling these products.
“The regulator now needs to stop Santander from making claims that people’s capital will be safe.”
Santander says it makes the risk clear at the bottom of the webpage, including the risk that if Santander becomes insolvent, the customer may not receive all of their money back.
The FSA found Santander’s key features documents did not explain that FSCS cover was not available on its structured products where the guaranteed minimum payment was not made to investors.
Money Marketing understands that other firms may not have made appropriate disclosures about limited FSCS cover for certain structured products during Which?’s investigation.
A Santander spokeswoman says: “Santander is disappointed with the outcome and has registered its opposition to the FSA’s findings.
“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.”