Consumers questioned the extent of the FSCS cover for the firm’s structured products in 2008 but it was not until January 2010 that Santander clarified the position.

During this time, Santander sold £2.7bn worth of structured products to consumers.

In June 2009, it told existing consumers the circumstances under which two products would be covered by the FSCS were limited but new customers were not informed until January 2010.

The fact Santander allowed sales to continue with unclear literature contributed to the seriousness of the breaches.

Tracey McDermott, acting director of enforcement and financial crime, said: “When firms provide literature about products, the information has to be correct and unambiguous. “After all, it is there to help people make informed decisions about whether to invest. The extent of FSCS cover is important to customers and firms must be clear about this in their Key Facts document.

“Considering that sales of these products took place between 2008 and 2009, a time of financial uncertainty, Santander should have moved more quickly to confirm under which circumstances FSCS cover would be available.”

Santander acknowledged it could have changed its product literature and training materials more quickly.

No customers suffered any financial loss as a result and no products were missold to customers.