Santander failed to pass on £183m of clients’ cash

A LOSS of a relative is painful enough without their bank hiding their money and not informing the nearest and dearest. Such an appalling matter has been acerbated by the sheer scale in terms of the number of clients involved, funds hidden, length of time and lack of action which is beyond belief.

Step forward Spanish bank, Santander. This behaviour did not involve just a handful or even a few hundred accounts. Relatives of over 40,000 bank clients were effectively defrauded until middle management owned up to the hierarchy and proper action was – very late in the day – taken.

Santander absorbed private bank Cater Allen and three former building societies: Abbey National, Alliance & Leicester and Bradford & Bingley.

Just prior to Christmas, the Financial Conduct Authority (FCA) slipped out a note which revealed that £183m of client money had not been passed on and that cases went back to 1980.

The FCA found that Santander’s probate processes were deficient and the bank was unable to properly identify the accounts of deceased clients. It held onto money that should have gone to beneficiaries, some of whom did not know of the funds held.

As long ago as 2013, one bank employee wrote an internal memo that the money involved was “somewhat eye-watering”. The board only learned of the deceit in 2015 which shows how poor both its internal accounting and external auditing are.

Santander has been fined £32.8m, paid interest at eight per cent and extra payments for losses incurred. Its chief executive says the bank is “very sorry for the impact these failings have had on the families and beneficiaries affected”.

Many would have expected transparency even at this late hour to know if any staffer has been disciplined and any dismissed. This cloak of silence does Santander no credit when it should be showing contrition and evidence that it has learned its lesson.