Last updated at 10:17 PM on 30th October 2010

http://www.dailymail.co.uk/money/article-1325168/Santander-subjects-couple-years-anguish-57-000-legal-costs.html?ito=feeds-newsxml

Financial Mail has repeatedly highlighted the shocking service, and in some cases basic security failings, at what is Britain’s most reviled and incompetent bank – Santander.

But in all the hundreds of cases we have reported on and helped to resolve, none goes quite so far in exposing the Spanish-owned bank’s entrenched mismanagement as the case of Lyn and Keith Isaac.

The couple, from Leatherhead, Surrey, were not Santander customers when in November 2008 Lyn wrote a five-figure cheque to be drawn from their HSBC current account and put it in the post. The money was to be deposited with another institution. But the letter was intercepted and the cheque stolen.

The female crook – probably well aware of the bank’s notoriously lax security – opened an account in a Santander branch. In spite of money-laundering regulations, it allowed her to do this with just one piece of fake identification.

The ID, a photo driving licence, was not checked or verified by bank staff and she went on to deposit the stolen cheque in another branch the following day.

A ‘suspicious activity report’ (SAR), which banks often place on accounts where they suspect fraudulent activity – for example a large deposit by someone who is unemployed or who does not live locally – was never put on the account.

The Isaacs, meanwhile, became concerned and HSBC was able to tell them the money had been deposited with Santander.

Lyn, 59, a retired executive secretary, and Keith, 66, a chartered accountant, informed Santander of the crime on December 3, 2008.

They asked for a block to be placed on the fraudulent account. But on the same day the fraudster requested two bank drafts, effectively emptying the account.

Had Santander implemented the block, or at least subjected the  account to increased scrutiny, the situation might have been saved.

But staggeringly, four days later Santander moved the funds out of the account, ready to be paid as requested by the fraudster. In three further days it completed the transaction and gave the Isaacs’ money to the criminal.

No identification was ever requested by Santander branch staff, either when the fraudster made the cheque deposit or when ordering the bank drafts. Nor did

bank staff notice that the signatures on the withdrawal slips did not match those on the ID.

What followed were months of anguish and stress as the Isaacs struggled to get their cash back.

Santander, meanwhile, would not co-operate in any way. Santander refused mediation

meetings with the Isaacs and, stalling for time, handed over incomplete disclosure documents requested by their solicitor.

At one point the bank made a derisory offer, indicating that it had no intention of settling the matter out of court. The couple eventually issued a writ against Santander in June 2009.

Lyn says: ‘Despite several attempts to get a settlement from Santander, over many months the bank dragged its heels, cynically and arrogantly drawing out our case and pushing up our costs.

‘It hoped we would be financially unable to proceed to a trial and vindictively played the system to its advantage. It only agreed finally to pay because we had the nerve to

pursue it. Santander has a cavalier attitude towards fraud and victims of fraud, especially when they are not its customers.’

The Mayor’s and City of London Court also took a dim view of Santander’s conduct. The bank was berated by the judge in one pre-case hearing for a ‘deliberate strategy of obstruction and obfuscation’ and for allowing costs to soar.

The Isaacs’ total legal bill has risen to £57,000, a far greater sum than Santander had

originally given to the crook. In June this year, with the court hearing only one week away, Santander finally indicated it was prepared to settle. So far it has repaid the Isaacs’ original cash, plus £12,000 costs.

Santander told Financial Mail it was working on a final settlement figure to cover all legal fees, distress and inconvenience caused to the Isaacs.

But the bank has still not apologised to Lyn and Keith Isaac and on Friday the Isaacs’ solicitor had heard nothing from Santander about possible payment.

Santander tried to assure Financial Mail that its security systems were adequate, saying: ‘The procedures we have in place to prevent fraud are appropriate and our staff are trained, but we acknowledge mistakes were made in this case.’

The bank also said it ‘regretted’ the fact that the Isaacs had to go to court. ‘We failed to look at the case from a human perspective,’ it admitted.