Santander fined over grieving families’ wait for £183m funds

Santander was left red faced on Wednesday when it was whacked with a near-£33 million fine for mishandling the finances of the dead and their surviving relatives.

The Spanish-owned bank is the second-biggest in Britain after RBS by market share.

Today the Financial Conduct Authority fined it £32.8 million for failing to handle the accounts of deceased customers with due care.

It did not transfer funds of £183 million when it should have done, affecting more than 40,000 customers.

Mark Steward, executive director of enforcement and market oversight 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.”

In the UK, Santander is a hotch-potch of failed former building societies Abbey National, Bradford & Bingley and Alliance & Leicester.

The watchdog ruled that its probate and bereavement processes failed. The bank did not properly communicate with deceased customers’ relatives, resulting in it holding on to money that should have been passed on.

Some of the bereaved people were unaware that the funds existed.

Santander said it has completed a “comprehensive tracing exercise” and has transferred the majority of funds in deceased customers’ accounts to their rightful beneficiaries. It has paid interest by way of compensation. It is changing its bereavement processes.

Nathan Bostock, UK chief executive, said: “Santander is very sorry for the impact these failings have had on the families and beneficiaries affected.”