High street banking giant Santander has been fined £32.8 million by the City watchdog for “serious failings” in processing deceased customer accounts.
The Financial Conduct Authority (FCA) said Santander did not transfer funds worth more than £183 million to beneficiaries when it should have done, which directly affected 40,428 customers.
Santander also failed to disclose information relating to the issues with the probate and bereavement process to the FCA after it became aware of them, according to the regulator.
The bank apologised to families of deceased customers who were affected by its errors.
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.”
The FCA said the fine would have been 300% higher, at £46.9 million, if Santander had not admitted its failings and agreed to resolve the case.
Its investigation revealed that Santander’s failings meant some beneficiaries were left without funds they were entitled to for many years.
The probe found the bank’s probate and bereavement process would stall and remain incomplete, leaving beneficiaries without the funds they were entitled to, despite being informed that a customer had died.
Or certain deceased customer money would not be identified and transferred to beneficiaries in cases where they were unaware of the existence of those funds.
Santander said it has since completed a “comprehensive tracing exercise” and has transferred the majority of funds in deceased customers’ accounts to their rightful beneficiaries, with compensatory interest where appropriate.
The bank has also conducted a root-and-branch review of its probate and bereavement processes and brought in a raft of changes.
Santander UK chief executive Nathan Bostock said: “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 co-operated 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.”
Details of the fine comes after Santander revealed in its third quarter trading update in October that it was “co-operating” with an FCA probe into deceased customer accounts.