Standing Order Paid When Cancelled? Help!!!!

adr0ck

If someone has a standing order of say £500 paid into their partners bank account every month to cover rent etc.

They split up and that person cancels standing order...however bank still pays standing order by mistake (bank admits mistake)......so person then asks for money back off bank.....which bank pays....then bank goes after monay from other person.....however other person states that the money was owed to them and the bank should go back to their customer

what are the legal things here?

who has to pay money back?

adr0ck

any help would be appreciated

sorry about the confusing statement....it is a bit complicated

Bossyboots

I would say that the other person must pursue the non-payee through the civil courts if they believe the money is owed and that it is no longer anything to do with the bank.

As far as the bank is concerned, the customer cancelled the standing order but they paid it. Therefore they are correct to refund it to their customer. It is none of their business whether it was due or not, their customer stopped the payment and that is all they need to know or get involved with. Therefore the bank has completed their liability and they should do nothing else. If they are having difficulty recovering this from the other person then that is their problem as they made the mistake. The could pursue that person through the civil courts if they choose but that is between them and the person that owes the money, not them and their customer.

Wyndham

I'm not sure I'm clear what you are asking, but I'll have a go!

Are you saying the person A had a standing order set up to person B, that was cancelled then still paid? If the bank admit the mistake (which you say they do) then the money should be reclaimed from person B to person A so both are back to where they were before the mistake was made.

Are you saying that the bank has approached person B and they have refused to pay it back? I think as it was a mistake then person B's bank has the right to take the money out of their account, but I could be wrong about that.

However, the bank, or banks involved should sort this between them I think.

If they can't / won't then it may be worth considering a claim in the small claims court (which would be person A against person B for the the £500).

If I've misunderstood, let me know, and I'll try again!

YorkshireBoy

Person A has got his money back (from the bank), and rightly so.

The bank has lost £500 because it paid out when it shouldn't have.

Person B sees a £500 regular credit appear in their account. They may well not have expected it if person A told them they were cancelling the SO.

Even so, person B now says to his/her bank "this payment is a regular one, and I was expecting it, and I've NOT been told it was to be stopped". This comment is passed to person A's bank and there is deadlock.


So, the outcome?...

Well, by way of example, A&L say that...

6.4 If an incorrect entry is made on Your Account by Us, then We will correct it. If We make the correction on any day after the date of the error, then it will be shown on Your Account statement.

http://www.alliance-leicester.co.uk/currentaccounts/ec03964.pdf

...which would imply that they can just remove the money and tell you either on your next statement or via your online interface.

However, the 'incorrect entry' was not made by person B's bank (A&L in the above case). The money was sent 'incorrectly' by person A's bank.

My 'guess' would be that person B's bank would not agree to allow the extraction of the £500 from their account, and so person A's bank should suffer the loss.

adr0ck

thanks for the responses

basically persons A's bank is trying to get the money back of person B (threatening court action)

as far as i'm aware persons b's bank will not take the money out of persons B's bank account to pay persons a's bank as that would be breaking the law

person b feels that person a owed them the money so therefore feels that they shouldn't pay the money back

i'm assuming that the bank will proceed with court action if nothing is paid.....so the only thing is for person a & b to come to some agreement to pay money back

would the bank accept payback of say £25 a month

thanks a lot guys

Wyndham

Not that it's helpful, but if it had been a direct debit it would be covered by the direct debit guarantee and would have been refunded. I'd cancelled a DD and it was taken anyway, and my bank refunded the money (and I assume claimed it back) without a quibble.

Standing orders are different though, and I don't know how to set up a direct debit between individuals, as the payee stipulates the amount so it could be really dodgy in terms of a fall out or dispute.

Maybe we need a 'standing order guarantee'?