Santander Didn’t Know What It Financed. We Did. It Was GAP Insurance.

There are weak complaint responses, there are insulting complaint responses, and then there are complaint responses so absurd they amount to an epic own goal.

Step forward Santander as our latest ‘Wall of Shame’ entry.

In this case, and in what is becoming a pattern, Santander’s position was that it did not know what type of insurance product sold by the dealership had been financed under its agreement.

It didn’t know what it had financed!

That is a breathtaking admission from a regulated lender.

Lenders cannot operate on the basis of, “We financed it, we profited from it, but don’t ask us what it actually was”. The whole legal and regulatory framework provides that the lender must know what is being financed and provides the required information accordingly.

We looked into it. Santander apparently preferred not to.

Unlike Santander, we bothered to dig a little.

And guess what?

It was GAP insurance.

So the product was not unknown. It was not lost in the mists of time. It was there to be identified by anyone willing to do the work.

That makes Santander’s position even worse.

This not ignorance, this is avoidance.

Santander would rather admit it did not have a clue what it was financing, rather than properly investigate a GAP mis-selling complaint.

An astounding position to take.

A regulated lender claiming not to know what it financed is damning

If a lender is legally responsible for entering into a regulated credit agreement, profiting from it, and complying with the rules that sit around it, then saying it does not know what product sat within that agreement is not a defence to a complaint.

It’s a confession that the controls were either hopelessly inadequate, or that the truth was too inconvenient to confront.

If Santander genuinely did not know what it financed, that raises the concern of inadequate checks before advancing credit and taking its profits from a customer.

If adequate checks were carried out, it raises the question of why it would falsely admit that it has no controls in place.

Neither response does Santander any favours.

This is what the culture looks like

Santander’s stance tells us a great deal about the culture behind GAP insurance, and indeed other products that are sold to consumers alongside their motor finance agreements.

It points to a lender prepared to finance virtually anything a dealership could slide into the deal, with little interest in identifying the products properly so long as the agreement was written and the money flowed.

That is the real scandal here.

Not just that a dealership sold the product.
Not just that a customer overpaid for it, and maybe didn’t need it.
But that the lender appears to have been happy to fund it first and ask questions never.

Just bundle it in, finance it, collect the return, and dismiss any future complaint on the basis of ignorance.

It is a remarkable position for a major lender to take.

Better to look clueless than confront GAP?

Santander has concluded that the less embarrassing option was to present itself as a lender with no real grasp of what it finances, rather than get to grips with a GAP complaint on its merits.

Think about how extraordinary that is.

A bank would rather sound reckless than responsible.
Rather sound oblivious than accountable.
Rather imply it financed add-ons blindly than properly investigate whether GAP was mis-sold.

That is how toxic this response is.

Once the truth is uncovered, that the product was in fact GAP insurance, Santander’s earlier hand-wringing uncertainty starts to look very convenient indeed.

Santander cannot have it both ways

It cannot claim the rights and profits of the creditor while disclaiming knowledge of what the credit actually funded.

It cannot present itself as a sophisticated regulated lender when the agreement is signed, then suddenly become a baffled spectator when a complaint lands.

And it certainly cannot expect consumers to accept that identifying the financed product was somehow beyond its reach when we managed to establish that it was GAP insurance.

So which is it?

Did Santander not know what it was financing, which would be a damning indictment of its systems and controls?

Or did it not want to know, because knowing would mean having to engage with a GAP mis-selling allegation?

Either way, the picture is ugly.

This should alarm regulators, not just consumers

A lender claiming not to know what insurance product it financed must set alarm bells ringing.

This is not just about one complaint file, because this is a pattern and it goes to the heart of oversight, governance and conduct.

If Santander’s position is that it financed the product but cannot identify it, what does that say about the care taken when these dealership transactions were being pushed through?

Santander’s response reveals more than it intended

Sometimes complaint responses are useful because they clarify the issues. Others are useful because they expose them. This one exposes plenty.

It exposes a lender apparently willing to admit it did not know what it had financed.
It exposes a culture that looks far more comfortable with profit than scrutiny.
And it exposes a regulator that is weak, and has little idea what is happening in the markets it is there to control.

The problem for Santander is that we looked further, found the answer and the answer was GAP insurance.

The mystery was never really a mystery at all.

Santander just preferred ignorance to accountability, and that is as damning as it is astounding.

Complaint escalated.