Wayne Barnett FCA | MIPW | STEP Affiliate
Lost Wills Results in Assets Being Incorrectly Distributed
Updated: Mar 15
Lloyds Banking Group failed to return the Wills of thousands of deceased customers to their families, leading hundreds of them to distribute assets to the wrong people.
The company discovered this year that it had about 9,000 Wills of deceased customers that had been stored as part of a “safe custody” service that was closed to new customers in 2011, according to internal documents seen by the Financial Times. The bank said that the estate was not affected in the majority of cases because the Wills in storage had either been superseded or another copy had been stored elsewhere.
However, it estimated that in hundreds of cases, customers’ estates were incorrectly distributed. Lloyds said: “We are investigating each case individually and where appropriate making contact with representatives of these estates. We are deeply sorry for the distress and inconvenience this has caused and will ensure that those affected are fully compensated.”
Lloyds Bank also holding 190,000 unassigned envelopes of other valuable papers
Lloyds, the UK’s largest retail bank, also found it was holding more than 190,000 envelopes of other valuable papers that it could not match to customers, a small proportion of which contained Wills. The group’s rectification department began working to address the problems in July. The mistakes are not expected to have a material financial impact on Lloyds, but highlight the logistical challenges and reputational risks that have led most major banks to stop offering safe deposit services.
Lloyds, Royal Bank of Scotland and Barclays were criticised in 2017 for operating “disorganised” storage systems that left some customers unable to find their items. Lloyds has since centralised all the items stored under its old safe custody scheme and digitised its paper records. It said this would help prevent a repeat of the problem with any of the remaining wills it holds, as it will be easier to trace them when they are notified of a death.
Metro Bank is now the only high street lender that offers safe deposit services in all of its branches. However, Lloyds began reintroducing deposit boxes in a limited number of branches in 2017. It charges between £200 and £475 a year for different sizes of box, but no longer allows customers to store Wills.
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