Tens of thousands of customers of the bank Santander were victims of misleading practices by the bank and they were encouraged to put money into investments which they were led to believe was safe, when in fact, they were risky.
These practices led people to invest around £3 billion into the risky investments and because of this practice the bank has been fined £1.5 million. The reason the bank was fined is because they did not update the literature related to the deceptive products until one year had passed.
Interestingly, the accounts which they were told were safe, were very similar to the sort of money that was being backed by the failed investment bank, Lehman Brothers. The investments made at the failed bank were obviously problematic as this bank is no longer in business. The brochures issued by the company failed to make it clear to customers involved with the investments that the money could be at risk if Santander went out of business.
This is not the first time the banks have been fined a significant amount of money for deceptive practices to their customers. Last year over £150 million of compensation had been paid to the customers of certain banks after the financial regulator made a decision about the PPI scandal.
Banks had already paid out over £60 million in 2010 and the amount of money the banks have lost from the PPI scandal is one of the most significant in the history of UK bank regulation. The law firm Freshfields did research on the PPI scandal and found out that Barclays was the bank who deceived their customers the most.
That bank alone was ordered to pay £60 million to their retail customers. HSBC however faced the largest fine of any retail bank for mis-selling bonds to its elderly customers.