Bank fined for not passing on customers' money: how to trace lost cash

The City watchdog, the Financial Conduct Authority, has fined high street bank Santander nearly £33m for systematically failing to distribute the assets of deceased customers to bereaved families.

The FCA said the bank failed to pass on more than £183m in cash and investment savings to rightful owners, directly affecting 40,428 customers.

The regulator concluded that the bank’s bereavement process between 2013 and 2016 was not fit for purpose. The problems identified included the bank failing to trace customer accounts, meaning money was sometimes lost and not passed on, and a failure to properly monitor the bereavement process, meaning that sorting out loved ones’ affairs sometimes took far longer than it should have.

In some cases, funds were held for several years, contributing to beneficiaries being deprived of their inheritance for a considerable amount of time, the FCA said. It also said the bank took too long to address issues with its processes after they had been identified.

Mark Steward of the FCA said: “Firms must be able to identify and respond to problems more quickly, especially when they are causing harm to customers. We will continue to be on the lookout for firms with poor systems and controls and will take action to deter such failings to ensure customers are properly protected.”

Since 2015 Santander has carried out remediation exercises to transfer funds from affected accounts to beneficiaries.

The bank has also paid interest on the funds of some beneficiaries in compensation.

Billions of pounds lie forgotten in neglected accounts. Under laws that took effect in 2008, money held in accounts that have been inactive for 15 years or more is declared dormant and makes its way to the Reclaim Fund, a large pot of lost accounts that preserves the assets and pays out some money to charitable causes.

The Dormant Asset Commission, in a report to the Government in 2017, suggested that billions of pounds in lost pension savings could also be transferred to the fund to go towards charity.

With all this dormant money floating around, how exactly do you trace lost cash?

Banks and building societies

You can search for lost accounts at British banks and building societies, as well as NS&I accounts, free of charge via mylostaccount.org.uk.

You can also search for money to which you are entitled, if you are looking for accounts of deceased relatives, for example.

Firms will usually be quick to respond, although their searches could take up to several months in some extreme cases.

This service can also be used to locate lost Premium Bonds, which are issued by NS&I.

Pensions

While the "pensions dashboard", which will allow us to monitor all our retirement pots in one place, has not yet been properly developed, the Government’s pension tracing service is the best place to start looking for lost funds. It can be found online, or you can call the pension tracing service on 0800 731 0193.

Investments

There is no one place to carry out a comprehensive search for lost investments such as funds, shares or bonds. You will have to contact the relevant investment platform directly and ask them about your accounts. If you have old share certificates you can also contact the company directly, as it should have records of all its shareholders.

Insurance policies

When firms are seemingly changing their names all the time because of takeovers, mergers and rebranding exercises, it can be hard to know where to begin with inquiries about old policies.

A good place to start, according to charity Age UK, is to approach the company directly. If you do not know the company, you can get in touch with a trade body.

The Association of Financial Mutuals represents mutual insurers, for example, and should know which companies have changed their names and how to get in touch with them. For life insurance, contact the Association of British Insurers.

If you come unstuck, you could pay for a tracing service such as the Unclaimed Assets Register.

If you have come into funds you previously thought lost, let us know. Write to harry.brennan@Finance.co.uk.