BACS payment errors and money recovery

[powerfulalbert]

Anyone know of examples where either a bank or the BACS system itself were held responsible when a mistake was made by the person advising the sort code / account number/account name.

 

The comment by both originating bank and recipient banks are that BACS systen does not check the account name and relies only on the numbers given. Any error is therefore the person advising sort code / account number.

 

Assuming for the moment the above is true, can anyone advise

 

• can one force the recipent bank to reveal name / address of the account holder to whom the funds were transferred? Does this need something like a court order?
  
• does the account holder to whom the funds were transferred have any legal rights to the funds / any obligation to report the error to his bank if noticed?
  

Any advice would be much appreciated as I am a total novice in these matters

[Conniff]

As with all deposits, it relies on the numbers. If you gave the wrong number then it will be deposited into the wrong account. The system doesn't know that you made an error, that may have been the intended destination of the deposit.

It would be wrong for the system to assume it knew best and change the destination of the deposit.

 

The bank should assist in recovery of the deposit, they know who the account belongs to and they should write to them.

 

The recipient has no rights to a wrongfull deposit, unless they can show they did not realise that a wrong deposit had been made. They could only do this by having similar sums deposited into their account around the same time each month.

 

How much are we talking?

[powerfulalbert]

Approx £22,000. The bank says it will provide my phone number to the account holder, I suspect I will hear nothing

[Hobbie]

It's not for you nor the wrong recipient to resolve, it is for the sending bank and receiving bank to resolve between themselves.

 

The receiving bank has a right to charge for resolving the problem, and if so it will be passed onto the sending bank, who in turn will pass it on to yourself.

 

The sending bank should of NEVER passed your details onto the recipient regardless if it is the wrong or right party.

 

But yes it is correct, BACS/CHAPS/SWIFT/IBAN all rely on numbers, and not names. The only thing that the system checks is the account number and sort code "match" this is the SORT CODE + ACCOUNT NUMBER * HOW MANY WEETABIX THE MANAGER HAS EACH MORNING. well, not quite, but account numbers aren't just random numbers it is generated against a cryptographic algorithm against the sortcode, so that the account number needs to be one that was generated against the sortcode, if the account number doesn't add up to what it should do when compared to the sortcode the system will reject the payment.

 

If I remember correctly it is something like

 

SortCode 11-22-33 (11 * 22 / 33 * "Digits" = Account Number)

[Conniff]

R v Shadrokh-Cigari [1988] Crim LR 465.

The defendant, who was the guardian of a child to whose bank account approximately £286,000 had been credited in error instead of £286, persuaded the child to sign authorities instructing the bank to issue drafts credited to him. The defendant spent most of the excess money before he was discovered, and was convicted of theft of the drafts on the basis that they remained property belonging to another, namely the issuing bank.

The Court of Appeal expressed the view that the conviction for theft was sustainable on two grounds: (1) under s5(1) as the bank still had an equitable interest in the drafts; therefore the drafts could still be regarded as property belonging to another; and (2) under s5(4) as the defendant had obtained the drafts as a result of the bank's mistake, and was under an obligation to restore the property or its proceeds.

 

 

R v Stalham [1993] Crim LR 310.

The defendant was notified that he would be receiving a pay rise of £4,080, payment to be in instalments. A transfer of the total sum was made to the defendant in error, and he was told that a stop would be put on the transfer, and a cheque for the first instalment issued. The cheque was issued, but a stop was not put on the transfer. When queried by a wages clerk, the defendant expressed the view that he believed it to be a tax rebate. The defendant signed a blank cheque which, with his brother's involvement, was subsequently made out to a woman who paid it into her account and gave the proceeds of the cheque to the defendant's brother. On a charge of theft, the defendant had contended that the money had not been property belonging to another. He was convicted and appealed.

The appeal was dismissed. The Court of Appeal held that it was bound to apply its previous decision in A-G's Reference (No 1 of 1983). As in that case, the property (the chose in action represented by the right to draw on the account) had been transferred as the result of a mistake by the employer. The result was that it remained, as against the employee, property belonging to another, because there was a legal obligation to make restoration, thus the provisions of s5(4) could apply.

 

I hope the above will add some info that will assist in you getting the funds returned.

 

The main points of the above is that it always remains your property and that you have a right to have it returned.

[powerfulalbert]

Hobbie

You say

It's not for you nor the wrong recipient to resolve, it is for the sending bank and receiving bank to resolve between themselves.

So far neither bank or agency has made any offer to get involved or accept they are responsible for resolving the situation. Are you confident your comments apply where the mistake was made by the person providing the sort code / account number i.e. there was no "error" by either of these parties.

So far the only support offered is to forward any letter I write to the account holder

[Hobbie]

Powerfulalbert,

 

I would say I am 95% sure, if the bank is unwilling to reclaim the funds back, most likely due to the "admin costs" of a few quid, then take the complaint further, and express the time limits involved.

 

Go to your branch, ask to speak to the most senior member of staff available, explain to them again point out the time scales so far.

 

If no luck then your only other option is to report the banks actions to Financial Ombudsman Service.

 

But remember if the person who received the payment has spent the money or withdrawn it, then it is a matter for the police, keeping a money transfer unlawfully is quite serious. Also the person receiving the money would most likely know the money is in the account wrongly (At a guess) and SHOULD of informed the own bank that the account received a credit from unknown source.

[Conniff]

Also the person receiving the money would most likely know the money is in the account wrongly (At a guess)

 

I wouldn't think £22,000 is likely to be missed as a wrong deposit.

[Hobbie]

Conniff,

 

No doubt about it, but not everyone checks the balance until receiving the monthly or quarterly statements.... It may of even been paid into a savings account, and only get annual statements

 

Or to make matters even worse.... It could of been paid into someones account, who unfortunately died some time ago and had no family thus no one to tell the bank, or even worse again... money paid into the account, and the same day HMRC or SOCA or another authority have frozzen the account assets pending a court case scheduled to begin in 2010, for 3 month!

 

A number of possibilities, thats why I said "At a guess" as I don't know the circumstances of the person who's account it was mistakenly paid into.

 

But, Powerfulalbert... Don't worry to much

[tbern123]

It's not for you nor the wrong recipient to resolve, it is for the sending bank and receiving bank to resolve between themselves.

 

All the sending bank can do in reality is attempt a BAC's recall. Which is asking the receiving bank for the money back. However, this is down to the receiving bank to agree. If they don't agree the sending bank, can't force them to return the money.

 

As previously mentioned if the cash has already been withdrawn, it is doubtful they will be interested. Sadly, I am not sure what the FOS will be able to do as both banks will be able to show that in relation to the payment they acted in good faith and without neglience as they were acting upon your written instruction.

 

I would not have thought that the FOS would instruct either Bank to refund you, when neither of them are technically responsible for the wrong account being credited.

 

Here is an article from the gaurdian

 

How can I retrieve cash from a wrong account? | Money | guardian.co.uk

 

Sorry if this post sounds down hearted and unsupportive but I think the only way you will get your money back is to go to the Police as if the funds have been spent and the account holder is unable to repay them they have committed an offence.

 

Theft (Amendment) Act 1996 (c. 62)

 

Dishonestly retaining a wrongful credit

(1) After section 24 of the Theft Act 1968 insert—

“24A Dishonestly retaining a wrongful credit

 

(1) A person is guilty of an offence if—

(a) a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest;

(b) he knows or believes that the credit is wrongful; and

© he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled.

 

 

(6) A person guilty of an offence under this section shall be liable on conviction on indictment to imprisonment for a term not exceeding ten years.

Edited June 12, 2008 by tbern123

[shywazz]

£22k paid into wrong bank account due to urs or some1 you knows error, and you want to lay the blame at some1 elses door, okay a mistake has happened, and god forbid a BIG mistake, if it were me, i would be spitting feathers at trying to get it back, visit the bank, and again explain the happenings, and seek what there can assist you with in regaining the funds back, no point going in the branch with all guns blazing, that will get you no where, and after all it was ur fault to start with, the bank will/should look into this matter, only because of the huge sum of money involved, the bank will have proceedures in place for such mistakes.

 

Fat fingers make mistakes, double check numbers etc b4 pressing the send button. A dear mistake but one that you might not repeat....

 

I've checked my three accounts and sadly its not gone in any of mine....

[Conniff]

Albert, whats happened?

 

I'm expecting a pint when you get reimbursed.

[yourbank]

This does seem quite intriguing.......

[skbuncks]

As a point of note I received £451 paid into my current account a couple of months ago. I called my bank up to query it (Lloyds) and got absolutely nowhere so decided to just sit on it. Then last week it was, without warning, removed from my account, presumably set back to whence it came. I then received a letter two days later saying payment made in error on such and such a date and corrected on such and such a date. I have since received the same latter a further three times......So it would seem they can reverse the transaction when it suits them

 

 

skb

[gemspan]

Hi there

 

I sent £300 to Barclays and was given the wrong bank account which was non-existent. Barclays took it upon themselves to change the account details and place it into an account. I contacted them to ask for them to return the money but they refused. I do not know if it went into the correct bank account but can only assume it did because they didnt contact me about it.

 

My question at the time was how can Barclays do this? They did not follow my instructions. Had they followed my instructions then the money would have been returned to sender. They just took it upon themselves to transfer the money to where they thought it would go.

 

I recently had £1000 go missing which was sent by CHAPS. You are most definitely entitled to the account numbers etc., to where they sent it and it is up to the bank to chase it as the other side will not do anything as you are not a customer. I would definitely get on to somebody very senior about this and pronto!!!

 

What an absolute shame but I suppose they did follow instructions to the letter if you gave them the account details. However if they placed it into the wrong account that is anothr matter.

 

Kind regards

gemspan

[Bilgeman]

I then received a letter two days later saying payment made in error on such and such a date and corrected on such and such a date. I have since received the same latter a further three times......

 

 

skb

 

 

That must have cost them. Everyone knows it costs the bank 35 quid to send each letter out!

[TomDickHarry]

Question for Powerfulalbert:

 

Any joy with your problem ? if so pls share - unfortunatley i've fond myself in pretty much the same situation !!!!:mad: