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Santander fined £32 million for failing families of deceased customers

The financial regulator has fined Santander £32.8 million for failing to process customers' accounts and investments effectively after they have died. 

The Financial Conduct Authority (FCA) says that Santander failed to transfer a total of £183 million from deceased customers' accounts to the beneficiaries of their estates when it should have done. In some cases, money was held for several years, leaving families and beneficiaries unable to access it.

Around 40,000 deceased customers' accounts were affected by the failings, which took place between 2013 and 2016.

The FCA also says Santander failed to report the nature or extent of the issues around its probate and bereavement processes after it became aware of them.

Santander has accepted the FCA's findings, meaning its fine was reduced by 30% from £46.8 million.

It has now transferred around two thirds of the money in question, and has paid compensation to affected beneficiaries "where appropriate".

What did the FCA find?

The FCA identified a number of failings in Santander's probate and bereavement processes, which meant the bank: 

  • Was less able to identify funds which were part of a deceased customer's estate.
  • Didn't communicate effectively with representatives of the deceased customers. This meant probate and bereavement cases were less likely to be closed.
  • Didn't monitor open probate and bereavement cases effectively.

As a result, some funds weren't transferred to the appropriate beneficiaries.

In some cases, Santander failed to identify funds belonging to deceased customers, meaning people who were entitled to money weren't made aware of its existence.

The FCA also says that Santander was too slow to address the issues and start remediation processes to transfer funds from affected accounts.

I think I'm affected – what should I do?

Santander says it has transferred the funds to the beneficiaries of two thirds of the affected accounts.

In some cases, it has also paid interest on the funds to compensate beneficiaries for the delay in receiving their money. It has also paid compensation for any consequential losses.

Santander says it has details to help track the beneficiaries of half of the remaining affected accounts. It says that anyone who thinks they may be affected should contact the customer service helpline on 0800 912 3123.

What does the FCA say?

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "These failings took too long to be identified and then far too long to be fixed. To the firm's credit, once these problems were notified to the board and senior management, they were fixed properly and promptly.

"But recognition of the problem took too long. Firms must be able to identify and respond to problems more quickly, especially when they are causing harm to customers.

"The FCA will continue to be on the lookout for firms with poor systems and controls, and will take action to deter such failings to ensure customers are properly protected."

What does Santander say?

Santander UK chief executive Nathan Bostock said: "Santander is very sorry for the impact these failings have had on the families and beneficiaries affected. We accept the FCA's findings and have fully cooperated with their investigation.

"We have now transferred the majority of customer funds and made significant improvements to our whole probate and bereavement process, ensuring we provide both a sensitive and efficient service to our bereaved customer representatives and those who are managing the estates of people who have passed away."

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