Santander did not transfer funds totalling over £183m to beneficiaries

Published - 8th March 2019

The Financial Conduct Authority (FCA) has fined Santander £32.8m (Discounted from £46m) for “serious failings” to effectively process the accounts and investments of deceased customers.

The numbers of estates affected is staggering 40,428 customers totalling £183m of funds that were not transferred when it should have been.  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.

Santander breached FCA principles for businesses 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, with adequate risk management systems, and by failing to treat its customers and those who represented them on their death fairly.

FCA principles for businesses

Principle 3 Management and control             

A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

Principle 6 Customers' interests      

A firm must pay due regard to the interests of its customers and treat them fairly. 

Principle 11 Relations with regulators            

A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.

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.  Santander has obviously apologised for the failings and has taken steps since to correct its policies and procedures, but given the recent IT failings which other lenders have experienced, and the problems that many professional estate administrators report in dealing with financial services institutions, it’s definitely worth examining in detail what it is that Santander was found to have failed in; 

  • The probate and bereavement process would start but:

    • it would stall and remain incomplete, meaning that funds would not be transferred to those who were entitled to them despite Santander being informed that a customer had died; or

    • certain funds belonging to deceased customers would not be identified and transferred to those who were entitled to them who were unaware of the existence of those funds.

  • Failing to follow up on communication with deceased customers’ representatives

  • ineffectively monitoring of open probate and bereavement cases to allow it to determine whether cases had progressed to closure.

  • 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.

To Santander’s credit it has since 2015 carried out remediation exercises, to transfer funds from affected accounts to beneficiaries. These exercises are almost complete and where possible Santander has located beneficiaries and transferred funds to them (or is in the process of doing so).  Where appropriate, Santander has paid interest on the funds to beneficiaries to compensate them for the delay in their receiving the funds, together with compensation for any consequential loss that was suffered.

Specific Bereavement Principles have since been developed and endorsed by the following British Banking Association (BBA) members and the Building Society Association (BSA): -

  • Barclays Bank

  • HSBC Bank

  • Lloyds Banking Group

  • Nationwide Building Society

  • Santander UK

  • The Royal Bank of Scotland


Further to the work by the BBA, The Lending Standards Board Financial Services Vulnerability Taskforce recent report focuses on more detailed codes of practice developed under the Taskforce recommendations, namely the Bereavement Principles 3 together with Third Party Access Principles 4.

It is evident in the industry that professionals acting as a third party with authority are still experiencing a Non-Adherence to the one-stop notice recommendation contained in Principle 3.  More work is needed here although developments in this area can be challenging to achieve due to banks legacy systems.

Recommendations were made that banks continue to work towards a full ‘one stop notice’ through intelligent and controlled information sharing.  Any development of services should be appropriate for use across all channels used by customers. 

Vulnerability remains an important topic for the industry, consumer bodies and regulators, with a growing focus on the delivery of fair customer outcomes.  There is a clear culture in the firms to ensure they do the right thing, with support from senior and executive management.  Identification of a customer in vulnerable circumstances, or self-disclosure by the customer, is the first step in enabling firms to gain an understanding of their needs and the possible solutions available.

Estatesearch takes an innovative data and workflow approach to supporting vulnerable customers by empowering the Personal Representatives to notify and collate financial records associated with the customer.  Our systems also help identify and collate historical addresses and previous names of the customer to assist banks in effectively searching their records. 

Find out more about our Additional Costs Warranty and how it can protect you and your client.