Santander UK has been fined £32.8 million by the Financial Conduct Authority (FCA) for holding on to millions of pounds in deceased customer accounts, in some cases for over two decades after their deaths. The FCA found the bank had failed to treat customers and their next of kin fairly by delaying or not completing the probate process, despite being informed that account holders had died.
In some instances, those entitled to inherit the deceased customer’s assets were not even aware that money held in Santander accounts existed as the bank failed to identify the funds. Following their investigation, the FCA declared that 40,428 deceased customers had been affected and that sums totalling £183 million that should have been transferred were not.
An internal review carried out by the bank, which investigated practices dating back to 1980, found that in one case a customer’s account remained open for 21 years after their death. In another, it was discovered that due to an administrative error Santander held duplicate files for one customer which resulted in an account holding £13,000 being left open, instead of funds being transferred to next of kin following the customer’s death.
Santander UK was launched in 2004, but the FCA’s investigations relate to longstanding cases involving customers that it took on when Alliance & Leicester, Abbey National and Bradford & Bingley either merged or were taken over by Santander. Since then, Santander has completed the probate process for 36,059 deceased customers, but the FCA found that this should have been achieved sooner.
The bank sought to address the issue in 2013, but the FCA were only informed two years later after it pressurised Santander for information. After a settlement was reached early, the FCA rewarded the bank by reducing the fine by approximately 30%. Had it failed to do so, the penalties faced by Santander would have totalled £46.9 million.
When a person dies, there are several legal steps that must be taken to deal with their estate. Someone must be appointed to take charge of collecting together their property, money and possessions, paying off any outstanding debts, and distributing their assets in line with the instructions in their Will. This process is known as probate.
The steps involved in the probate process include:
• Obtaining letters of administration or a grant of probate
• Administration of an estate
• Preparing estate accounts
• Advising on inheritance tax and completing tax returns
• Making post-death arrangements that reduce inheritance tax liabilities
• Distribution of assets to beneficiaries
The estate planning team at Wilford Smith offer a comprehensive service on all matters concerning probate, providing practical and sympathetic advice throughout this process. We can provide support to help deal with administrative responsibilities quickly and professionally, alleviating stress and anxiety at an already difficult time.