Bank Error and money taken

[AlexOT]

Hi all,

 

Please could you help with the following issue.

 

Around the 25th Oct 2015, I was due to complete on a few property transactions after buying at auction. On one of them, the finance deal that I had in place collapsed and I was forced to find another method of payment and so my Dad and other family members to see if I could get some cash together.

 

Fortunately, they were able to help and I got the funds through in time to pay. Long story short, my Dad went into his local branch and did a CHAPS transfer for £25,000 which the bank sent to me twice. At the time, I didn't know how much each person was going to send so when I saw two lots of £25,000 come in from him I assumed that £25k was the maximum he could send in one go (as it is for my bank) and that he'd done it twice.

 

Assuming that it had come through from my Dad, rather than as a mistake, I spent the money on getting the place paid, some work done, and some other payments that needed to be made.

 

My Dad then contacted Barclays after he saw two faster payments had been sent instead of the CHAPS that he had paid for after realising that he was now way overdrawn. Barclays have put the money back into his account as it was their mistake and not his.

 

Since finding this out from my Dad calling me, I have made contact with the Barclays employee who made the mistake to arrange a solution. He told me on Tuesday that he'd get back in contact with me Wednesday after speaking to his team leader. This didn't happen. I've since tried calling twice with no answer.

 

I had a look at my online banking today to make a payment and saw that the balance I had remaining had been taken by Barclays. I need the money in there to pay for bills etc so called Halifax (my bank) to ask why they allowed this payment without any authorisation from me or any contact with me. They have now put the money back into my account and are going to be in contact with Barclays to find a way forward.

 

My questions are:

 

1) Is it legal for the bank to just take the money out of my account without contacting me?

 

2) Although I have no major issue paying the money back, am I legally obligated to considering it was their mistake and I spent it thinking it was given to me by my Dad?

 

3) I don't currently have the full amount available to pay back. What would be the suggested way forward if the answer to 2) is Yes.?

 

Many thanks in advance for any help given,

 

Alex

[slick132]

Hi Alex,

 

This has all happened very fast - less than 2 weeks !

 

I think you need to be prepared to repay the money to Barclays quickly.

 

This may have been an error on Barclays part initially but neither Barclays nor your bank (Halifax) are likely to believe that you were unaware if how much YF was transferring to you.

 

Referring to your Q's :-

 

1. Halifax and Barclays will probably discuss the case between them and decide what to do to resolve the matter. I doubt they have acted illegally or unlawfully.

 

2. Yes, in my opinion you'll have to repay the money. Even though it was Barclays' mistake initially, you and/or YF failed to exercise due diligence by discussing the matter as would be normal, given the amount involved.

 

3. I expect the bank(s) will require full repayment promptly and I wouldn't be surprised if they took court action to get this.

[AlexOT]

Thank you for your reply.

 

When I spoke to Halifax about putting the money back into my account he told me that there are some guidelines that they like to adhere to but answered indirectly when I asked for more details and to confirm whether these are just guidelines or whether they are lawful practice. I find it strange that it could be lawful for them to take money out of someone's account, regardless of reason, without contacting them first.

 

I think you're probably right that they will want it back ASAP. I just wonder what the lawful procedure would be and if there have been any similar cases where the ruling perhaps went a different way

[slick132]

Hi Alex,

 

The banks often work together, both for their own benefit, and to keep life easy for themselves.

 

As regards repayment, if you don't repay in the manner they decide, they can take recovery action, ruin your credit files and/or take court action.

 

I have to say I haven't come across any case similar to yours.