The Financial Markets Authority (AFM) in the Netherlands has fined Santander bank some €3.7 million for providing irresponsible loans.
The penalty, given on 9 July this year but disclosed on Wednesday, is based on a study of 10 files from 2021.
Authorities concluded that Santander obtained too little information about the financial position of customers in 4 out of 10 files, leaving debtors vulnerable. It provided irresponsible credit in half of them, added the AFM.
"This is serious, because SCF [Santander Consumer Finance] structurally failed to comply with one of its most important obligations towards its customers," said Jos Heuvelman, director of the watchdog organisation.
"After all, a loan that is too high can leave consumers with too little money left to pay their fixed living expenses," he added.
Credit providers are required to collect information on the income of their customers, as well as certain fixed expenses, in order to assess the risk level of the loan.
"When credit providers do not comply with the rules, not only are the interests of consumers harmed, but the level playing field in the credit market can also be disrupted," explained the AFM.
The watchdog's penalty marks the second time Santander has been hit by the group for irresponsible lending, meaning the fine is increased. In 2019, the bank was fined some €1.1 million.
According to the AFM, Santander is "taking measures to prevent repeat offences in the future".
Some customers have also received compensation.
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