Santander Fined Millions for Holding Deceased Customers’ Funds

By |2019-01-16T15:27:40+00:00December 21st, 2018|

The Financial Conduct Authority (FCA) has fined high street bank Santander £32.8 million. This stems from an investigation into Santander holding back deceased customers’ funds when the Probate process should be complete. The investigation found that £183 million went untransferred, affecting exactly 40,428 deceased customers.

The FCA found that a poor Probate process was to blame. Some of the issues included the banks’ inability to monitor the probate cases properly, so that it could not tell whether the cases had ever been closed, poor communication with the deceased’s’ relatives causing delays and finally failure to identify if a customer had multiple accounts. As a result of all of these issues, money was held in some cases for a number of years and beneficiaries had no idea of some of the accounts that their loved ones own.

A notice from the watchdog states: “A bank is required to have an effective process for dealing with a deceased customer’s accounts and investments from notification of death to the transfer of funds to those who are entitled to receive them. The flaws in the process existed before this time and affected Santander’s ability to close accounts of deceased customers, including legacy accounts from Abbey, Alliance & Leicester and Bradford & Bingley, with recorded dates of death as early as 1980.”

Our MD, Paul Dodsworth, commented on the issue: “We often struggle when working with the deceased’s bank. It is not just Santander who fall short of acceptable service levels. The processes in place are often complicated, documents are requested haphazardly, and the process itself very lengthy.

However, there is positive news. Santander UK chief executive Nathan Bostock says: “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.

This co-operation with the FCA reduces their fine from £46.9 million to £32.8 million.