Santander hit with £32.8m fine over probate failings

Santander 480The 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.”

Recommended

2

All Transact staff to become shareholders after IPO success

All staff at platform Transact will receive shares in its parent company IntegraFin following the success of its March flotation on the London Stock Exchange. In full year results released today, IntegraFin chief executive Ian Taylor says all company staff will be made shareholders. He says: “By virtue of the flotation, we are now in […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

34

FOS tells Lighthouse to refund advice fee

The Financial Ombudsman Service has told an adviser to refund a client’s £970 advice fee and pay 8 per cent interest, plus £500 compensation, after it refused to sign a form declaring advice had been given. In the case, a client referred to as Mr B was advised by Lighthouse Advisory Services to transfer two existing […]

Solving the income puzzle

There is a puzzle at the centre of financial markets. The global economy is growing, there are signs of inflation and interest rates are going up, yet yields remain low. In this article, James Foster, manager of the Artemis Monthly Distribution fund, unpicks this conundrum and looks at where investors can find income. There is […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Dealt with Santander Probates 10+ years ago.

    Apparently they are as poor now as they were then.

  2. And the banking sector still thinks it can deal successfully with the public, who will learn to love them. All the sports personalities, IT help,beautiful horses and fancy ads won’t make any difference to the low public opinion until they actually do what they are supposed to – give the customer a decent, uncomplicated banking deal.

    • The ‘horse’ advert really bugs me for that very reason!

      The premise of the advert (we’re by your side) is at odds with everything generally experienced with the banking sector (as evidenced by the article above) who seemingly lurch from one business model to another, depending on ‘where the profit is deemed to be’.

  3. Couldn’t happen to a more deserving bank!

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com