The Financial Conduct Authority has fined Santander £32,817,800 for failing to effectively process and distribute the funds of customers who had passed away. These failings in their probate and bereavement process resulted in 40,428 customers being directly affected by more than £183 million that was not passed onto to beneficiaries.
Mark Steward, executive director of enforcement at the FCA, 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.”
Santander’s probate and bereavement service contained many failings such as adequate risk management systems. These faults in the system meant that Santander were unable to effectively identify all of the deceased’s assets that were being held with them and as a result these funds were not distributed to the beneficiaries. They also identified failings in Santander’s communication with the deceased’s customers representatives, the executors and administrators of the estates, by failing to follow up and monitor open probate and bereavement cases.
All of these inadequacies in their processes lead to probate and bereavement cases starting but stalling and remaining uncomplete resulting in funds not being transferred even when Santander had been notified of the death or funds not being identified at all so that the beneficiaries were unaware of their existence.
Since the involvement of the FCA Mark Steward remarked that,
“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.”
Hopefully since the involvement of the FCA Santander’s probate and Bereavement service has been improved to prevent future customers and bereaved family members experiencing the same issues.