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FCA fines Santander £32.8m for probate and bereavement failings

The FCA has fined Santander UK £32.8m for failings in its “flawed” probate and bereavement processes.

Over three years between 2013 and 2016 more than 40,400 customers were affected by the failings, where a total of more than £183m of funds were not transferred to beneficiaries when they should have been, the FCA says.

According to a notice from the regulator the bank was found to be unable to effectively identify all the funds it held which formed part of a deceased customer’s estate, had poor communication with deceased customer representatives, increasing the chance of probate and bereavement cases not being closed, and was unable effectively monitor which cases had progressed to closure.

The FCA states the impact of the failings was:

  • probate and bereavement processes would stall and remain incomplete, meaning that funds would not be transferred to those entitled to them despite Santander being informed a customer had died; or

  • certain funds belonging to deceased customers would not be identified and transferred to those who were entitled to them who were unaware of the existence of those funds.

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.”

Santander’s fine was reduced by 30 per cent because it cooperated with the FCA and did not contest the findings.

Although the period of failings for which the FCA fined Santander was from 2013 to 2016, it says there were issues with probate from long before that.

It says: “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.”

FCA executive director of enforcement and market oversight Mark Steward says: “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.

“Santander held on to the funds in some cases for many years without beneficiaries being aware of their existence, let alone enjoying their benefit.”

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.”

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