Transfer Made In Error...

[darkcyde]

Hi - bit of a strange situation here....

 

Person A made an internet transfer but entered the wrong details, accidentally using an old sort code and account number.

 

Person A contacts their bank (Halifax) and asks what they can do....Halifax say they can do nothing and advises Person A to contact recipient bank (Santander).

 

Santander refuse to discuss accounts with Person A as they are not the account holder.

 

Person A contacts Person B (the Santander account holder).

 

Person B contacts Santander Business Banking (business account) but they will not discuss account as the account is closed, no transfer history can be recalled so identity cannot be confirmed. (account in question IS closed as has been recently confirmed, and was closed by Santander themselves following a lengthy argument about huge overdraft of hundreds of pounds which amounted from an £8.50 charge levied by Santander against the account, and Santander have not been in contact about the situation in nearly 3 years following the last correspondence from Person B to Santander).

 

Person B writes to Santander giving them 14 days to return money to Person A otherwise a complaint will be lodged with regulatory body.

 

Person B receives letter this morning (16 days after deadline date) stating that payment from Person A has been credited to the closed account to offset overdrawn closing balance and they will not be returning the funds to Person A.

 

My question is can a bank legally keep hold of money that they have been told was sent in error and doesn't belong to them or Person B? They obviously couldn't release the details of either Person A or Person B to either party to resolve the issue, so where does everyone stand? This has been going on since March of this year (2012).

 

Flip the situation over; a bank accidentally credits someones account with funds, the person spends the money knowing they don't own it, and they go to jail. How is this situation any different!

 

I'm guessing that with all the flap about excessive bank charges, Santander decided to step away from the situation and just close the account. No Credit Rating records have been effected by the account (sole trader account, no limited liability).

 

Does anyone have any suggestions? Are they calling Person B's bluff over the threat to go to Trading Standards et al?

[BankFodder]

They are obliged to take action . Look at the FSA KNow your rights guide - but also the Payment Services Regs - http://www.legislation.gov.uk/uksi/2009/209/contents/made

 

I can't remember what they say but I think that you need part 5 or 6.

 

Let us know what you find

[darkcyde]

The way I see it is this...

 

Requests for refunds for payment transactions initiated by or through a payee

64.—(1) The payer must request a refund under regulation 63 from its payment service provider within 8 weeks from the date on which the funds were debited.

(2) The payment service provider may require the payer to provide such information as is reasonably necessary to ascertain whether the conditions in regulation 63(2) are satisfied.

(3) Subject to paragraph (4), the payment service provider must either—

(a)refund the full amount of the payment transaction; or

(b)provide justification for refusing to refund the payment transaction, indicating the bodies to which the payer may refer the matter if the payer does not accept the justification provided.

(4) Where an agreement in accordance with regulation 63(3) applies, the payment service provider must, notwithstanding that a condition in regulation 63(2) is not satisfied, refund the full amount of the payment transaction.

(5) Any refund or justification for refusing a refund must be provided within 10 business days of receiving a request for a refund or, where applicable, within 10 business days of receiving any further information requested under paragraph (2).

 

Person B contacted Santander notifying them of the error and requesting a refund within 7 days of the transaction, therefore they should refund. Santander could, however, refuse under Section 3b.