LONDON – Santander's British arm is under investigation by the UK financial regulator for possible investment advice failures and could face a fine or license changes that prevent it from offering such services in future, four industry sources said.
Britain's Financial Services Authority (FSA) said earlier on Wednesday it had referred a major high street lender to its enforcement division in the latest clamp down on an industry reeling from mis-selling and interest rate-rigging scandals.
UK banks are facing bills totaling billions of pounds after a string of scandals, including mis-selling payment protection insurance (PPI), misleading customers about interest rate hedging products and a global interest rate rigging scam.
The FSA declined to name the lender. However, it noted that such a move, which came after spot checks during a review of the quality of advice available at six major banks and building societies on British high streets, would only have been ordered if the company had a history of poor advice.
Santander UK declined to comment on whether it was being investigated by the FSA. A spokesman said: "We are considering the findings in the context of the significant actions we took in 2012 to prepare for the post-RDR (Retail Distribution Review) world."
The FSA last December introduced new rules under its Retail Distribution Review about the way investment advice is provided, which ensure advisers are better trained and no longer receive commissions for making sales.
(Reporting by Steve Slater, Kirstin Ridley and Matt Scuffham, editing by Sinead Cruise)