Santander has been fined £32.8 million by the Financial Conduct Authority (FCA) for failures in the way it dealt with the accounts of over 40,000 customers. What went wrong and what does it mean if you bank with Santander?
Santander fined millions
The FCA has fined Santander £32,817,800. It’s an enormous sum, but Santander would have been fined £46 million if it hadn’t cooperated with the FCA. What did Santander get wrong?
The FCA found several serious failings:
- Santander failed to transfer funds to beneficiaries when it should have done. In all, it failed to transfer funds totalling over £183 million to 40,428 beneficiaries when it should have done. This number represented just under 4% of those who died between 1st January 1980 and 31st December 2014. The longest that a beneficiary waited for money was 21 years (I can barely believe I’m typing this).
- Santander did not have a robust process in place for dealing with relatives of deceased customers.
- Santander became aware of its failings by November 2013, but failed to inform the FCA of the issues with its probate and bereavement process until 2015. The rules are very clear and it should have told the FCA as soon as it became aware of the problem. Not only did it fail to inform the FCA, but it was holding regular meetings with the FCA, in part, because it wasn’t dealing with deceased customer accounts in its investment business properly. The problem with banking customers was far bigger than the issue with investment accounts.
- Santander failed to treat deceased customers and those who represented them on their death fairly.
When relatives or professional representatives of deceased customers contacted Santander, it didn’t always follow up with them. This meant cases were not closed and therefore money wasn’t transferred to those who were entitled to it. In some cases, funds were held for many years meaning beneficiaries could not access them for a considerable amount of time.
What I find particularly shocking about this case is that one of the reasons for Santander failing to transfer funds to beneficiaries was because it couldn’t actually work out how much the deceased customers had in their accounts. These customers were a mixture of people who had recent accounts and those that had closed accounts; they weren’t all customers with closed accounts where it could have been more difficult to find their details.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, 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. The FCA will continue to be on the lookout for firms with poor systems and controls and will take action to deter such failings to ensure customers are properly protected.”
Santander says it acknowledges the findings of the FCA and has completed a comprehensive tracing exercise; transferring the majority of funds in deceased customers’ accounts to their rightful beneficiaries, with compensatory interest where appropriate.
Nathan Bostock, Santander UK CEO, 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, ensuring we provide both a sensitive and efficient service to our bereaved customer representatives and those who are managing the estates of people who have passed away.”
What can you do if you have been affected?
Santander says that, where possible, it has located beneficiaries and transferred funds to them, or is in the process of doing so. It also says that, where appropriate, it has paid interest on the funds to beneficiaries to compensate them for the delay in receiving the funds, along with compensation for any loss that was suffered.
Santander has reviewed its probate and bereavement processes and systems. If you think that you have been affected, Santander says:
- Customer representatives can notify Santander of a death in branch, via post (Bereavement centre, PO Box 524, Bradford, BD1 5ZH), over the phone (0800 587 5870, 8am to 7pm Monday to Friday and 9am to 2pm on Saturday) or online. You only need to tell Santander once and they will manage the whole portfolio.
- Santander now has a dedicated bereavement team who have received specialist training to ensure that they provide the best service to bereaved customer representatives and their families. This team manages all bereavement cases.
SAVVY TIP: Santander has a bereavement guide, which you can download online (opens as a PDF).
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