Santander the latest bank put under the microscope by the FSA

Santander is facing a large fine after the Financial Services Authority places banks under secret monitoring. The City watchdog organisation discovered that one out of every four building society and bank advisers offered poor advice when mystery shoppers visited their branches.

The Financial Services Authority turned Santander over to enforcement for a heavy fine. This may force the bank to shut down its advice business, although the bank chose to control the damage by announcing on the same day that is was simply starting a strategic review of practices.

Five other financial banks or building societies were told that they had to improve their practices after the mystery shoppers visited their institutions. The watchdog stated that it was disappointing to see some of the same mistakes spread out across the industry.

Director of supervision, Clive Adamson, stated that when you consider the enforcement action take in the past and the previous guidance that they have offering the banking institutions it is very disappointing that there are still so many advisers within the retail banking sector that are making basic efforts.

He did mention that he was glad to at least see some companies take very swift action to correct the situation when it was brought to their attention, but noted that they will be under close scrutiny to make sure that the corrections are made.

This is the first time that the FSA has published a review since it last set in mystery shoppers to check on payment protection insurance back in September of 2008. This investigation found a large financial scandal that ended up costing the industry as much as £27bn.

The Financial Conduct Authority will be soon be receiving a majority of the FSA powers and is expected to launch similar investigations in the future within the banking industry.