Santander UK has been fined £32.8m by the Financial Conduct Authority (FCA) for failing to properly process the accounts of deceased customers.
Santander did not transfer funds totalling over £183m to beneficiaries when it should have done, affecting a total of 40,428 customers directly.
And, after it became aware of the issues, the bank failed to disclose the problems to the FCA.
The FCA said the problems “took too long” to be identified and 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,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
There were weaknesses in how Santander organised and controlled its probate and bereavement processes, the FCA said.
This meant that the bank:
- failed to follow-up on communications with deceased customer representatives, which increased the likelihood of cases not being closed
- did not effectively identify all the funds it held which formed part of a deceased customer’s estate
- could not determine whether cases had progressed to closure
As a result, despite Santander being informed that a customer had died, funds would not be transferred to those who were entitled to them.
And in instances where deceased customers had several different bank accounts and investments, the bank failed to identify these funds, which meant that those who were entitled to them remained unaware of the existence of those funds.