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Santander gets heavy fine for holding on to deceased clients' assets

Thursday, 20 December, 2018

High street bank Santander has been fined nearly GBP33 million for consistently failing to pass on the assets of thousands of deceased customers to their personal representatives and beneficiaries, sometimes holding onto them for several years.

The bank improperly retained a total of GBP183 million belonging to 40,428 accountholders, said the Financial Conduct Authority (FCA). Weaknesses in its probate and bereavement process left it unable to identify all the assets held by a deceased customer who had multiple accounts. It was also poor at communicating with the deceased's relatives and personal representatives, delaying estate administrations. Moreover, Santander did not monitor its probate cases properly, so that it could not tell whether they had ever been closed.

Typically, probate processes would start but then stall, so the money in a deceased person's account would not be transferred to the personal representative, even though proof was provided that the customer had died.

In other cases, the bank failed to realise that the deceased client had held several accounts, so if the personal representative was also unaware of the existence of those accounts, the money in them would never be released by the bank. In some cases, funds were held by the bank for many years.

Santander also did not cooperate fully with the FCA when the latter began investigating its probate and bereavement shortcomings, between 2013 and 2015. 'Santander did not notify the FCA of the nature or extent of the issues it faced, including the numbers of potentially affected customers and assets, and was selective in the information it provided', said the FCA.

The problems were only resolved when the bank's senior management learned of them. Since then the bank has overhauled its procedures, and in some cases has paid interest and even compensation for consequential losses to affected beneficiaries. It also accepted the FCA's findings without demur, thereby reducing its fine from GBP46.9 million to GBP32.8 million.

Sources