FCA Fines Santander $42 Million Over Dead Customers' Funds

(Bloomberg) -- The U.K.’s Financial Conduct Authority fined Banco Santander SA’s U.K. unit 32.8 million pounds ($42 million) -- the regulator’s biggest penalty this year -- for failing to pass on inheritances to dead customers’ beneficiaries.

The bank didn’t transfer funds totaling 183 million pounds to beneficiaries when it should have, affecting 40,428 customers, the regulator said Wednesday. The bank also failed to disclose information to the FCA about issues with the probate and bereavement process when it became aware of them.

It’s the biggest FCA fine issued in 2018, and it accounts for more than half of the total value of fines -- 60.5 million pounds -- that it’s made so far this year.

Santander said in a statement that it apologizes to the families and beneficiaries of the customers. It’s now transferred most of the funds in the effected accounts to the right beneficiaries and paid compensatory interest, it said, and has improved its systems.

“These failings took too long to be identified and then far too long to be fixed,” said Mark Steward, the FCA’s executive director of enforcement and market oversight. “To the firm’s credit, once these problems were notified to the board and senior management, they were fixed properly and promptly.”

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