Santander has been fined £32.8m by the Financial Conduct Authority (FCA) after failing to transfer funds worth more than £183m to beneficiaries from the accounts of its deceased customers.
The regulator reported that 40,428 customers were directly affected by this failing.
The bank also failed to disclose information relating to the issues with the probate and bereavement process to the FCA after it became aware of them.
Commenting, FCA executive director of enforcement and market oversight Mark Steward said: “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.”
The FCA reported that Santander breached Principle 3 and Principle 6 between 1 January 2013 and 11 July 2016 by failing to take reasonable care to organise and control its probate and bereavement process responsibly and effectively, and by failing to treat its customers and those who represented them on their death fairly.
The authority revealed that, in some cases, funds were held for many years contributing to beneficiaries being deprived of the use of them for a considerable amount of time.
Furthermore, Santander took too long to address the issues within its probate and bereavement process, once it became aware of them, and to commence remediation exercises to transfer funds from affected accounts to beneficiaries.
Santander did not contest the FCA’s findings and agreed to resolve the case, and therefore qualified for a 30 per cent (Stage 1) discount. Were it not for this discount, the FCA would have imposed a financial penalty of £46.8m on the bank.
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