Santander UK has recently been fined 12.4 million pounds by the Financial Conduct Authority, or FCA. This is one of the largest retail banking penalties in history. This fine was a major blow to Santander UK. They have always focused on providing excellent services to customers. They were also trying to improve their customer service.

Santander Fined £12.4m

Santander UK was fined because they provided their customers with unsuitable investment advice. The bank has issued an apology to its customers. Santander UK has also stated that they will be contacting customers who may be entitled to compensation in the near future.

Tracey McDermott works for the Financial Conduct Authority. She is the director of enforcement and financial crime. She stated that Santander UK has failed its customers miserably. Santander UK’s customers thought the bank would assist them with managing their money. However, the bank did not live up to their responsibilities.

McDermott also stated that people are losing trust in financial services. If this trust is going to be reestablished, then customers will have to be given the proper advice by people who have an understanding of what they need.

Below are some of the failures that the Financial Conduct Authority identified:

• Advisers did not take into consideration the risk that people wanted to take while making an investment.
• Santander UK did not make sure that people were given clear advice.
• Santander UK did not conduct checks to make sure that the investments were suitable.
• Santander UK did not make sure that new advisers received the proper training before they gave investment advice.
• As a result of poor monitoring, poor advice was not always detected.
• The Financial Conduct Authority stated that the bank’s response was too misleading and positive.

An initial investigation launched by the Financial Conduct Authority showed that approximately 25 percent of the customers had received poor investment advice. The report also showed that 15 percent of the advisors did not have enough information to give suitable advice to customers. Additionally, the report showed that 11 percent of people were given advice that was misleading. The regulator for the Financial Conduct Authority had visited 200 of the bank’s branches.

The last time that Santander UK gave out investment advice was in spring 2012. The bank stopped given advice after concerns were raised by the Financial Conduct Authority, which was the regulator at the time.

Steve Pateman is the head of Santander UK. He stated that the bank did not receive that many complaints from customers. He also issued an apology for the bank’s failure to meet the required standards.

Additionally, Pateman stated that when concerns were raised, the bank responded quickly. The bank’s investment advice service ended in December 2012. In March 2013, the bank’s investment advice division was completely closed down. The investment advice division had approximately 800 employees. He also stated that he is confident that the mistakes will not happen in the future.

According to the Financial Conduct Authority, the value of stock markets has increased since many people made their first investments. That is why the losses that customers experience could be small. People who held a premium investment could possibly receive compensation if they did not receive a service after they paid the price for it.

This is not the first time that Santander UK has received a fine from the Financial Conduct Authority. The bank received a 1.5 million pound fine in February 2012. They were fined because they did not respond to their customers quick enough and explain whether their customers’ investment were covered under the Financial Services Compensation Scheme.

There is some good news for Santander UK. They agreed to a settlement during the early investigation. As a result of this, the fine was cut by 30 percent. The bank has not released a comment on the settlement.

Santander UK is not the only bank that has stopped offering investment advice to its customers. Barclays was the first major bank to stop giving their customers investing advice. Lloyds Banking group is another one of the major banks that has stopped its mass investment advice service. Today, the bank only gives this service to customers who are wealthy.

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim

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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.