Bank took payment from account, but didn't pay recipient

htcopp

Can I get compensation for the following:

I made a faster payment for a bill, which was successful according to my statement.

So, I was shocked to receive a fine and a late notice from the recipient. I queried this with my bank and they assured me that the payment was made over a month ago.

However, after investigation, it turns out that my bank had been holding the money and have only just sent the payment to the recipient.

This has caused much distress, firstly because I am being charged a late fee and all the calls I have had to make over the last few weeks to get this sorted.

I should be able to get the charge back from the bank ( fingers cross), but does anyone have any thoughts about compensation...should I take this complaint to somewhere specifically....as anyone had anything similar happen.

I thought the whole point of faster payment, was that the payments would be fast...not take 7 weeks to be received!

zxspeccy

The Faster Payments system works when payments go to a Faster Payment aligned sort code (i.e. a sort code that is able to accept Faster Payments). In most case payments will credit instantaneously, and if anything goes wrong with the payment (e.g. beneficiary account is closed, invalid account number, sort code is not Faster Payment aligned) then it will bounce back same day to your account.

I have never heard of a bank holding onto a Faster Payment as the system should not work like that, it either get applied or rejected same day. If your bank has admitted that they have held onto your money for seven weeks, then complain via the normal channels, ideally in writing. If the bank upholds your complaint then you would be entitled to be refunded for all “out of pocket” expenses, and have grounds for compensation (negotiable with you bank).

One last point, banks can sometimes hold onto fund under the Anti-Money Laundering Act and in this case you would not be entitled to any compensation. However this rarely happens with Faster Payments and does depend on the amount you are sending and who the beneficiary is.

Let us know how you get on as in the four years that Faster Payments have been in existence I have never heard of this type of issues happening before.

htcopp

Thank you for your response!

Right, I have just heard from my bank that the faster payment left my account, but it did go through a holdings account before it reached the beneficiary, and that the holdings account was not related to my bank, but belonged to Barclays bank....which isn't even the beneficiary bank...they bank with Metro bank. They have offered no explanation as to why it would go into a holding account at Barclays.

They have confirmed that there were no anti-money laundering restrictions and that all the account details were correct, so the customer service rep seem to be also confused as to why this would happen.

Could they have perhaps sent it to Barclays by mistake? or Barclays anyway connected to Metro? I can't seem to find anything linking the two online.

Do you have thoughts on this?

dunstonh

Right, I have just heard from my bank that the faster payment left my account, but it did go through a holdings account before it reached the beneficiary, and that the holdings account was not related to my bank, but belonged to Barclays bank....which isn't even the beneficiary bank...they bank with Metro bank. They have offered no explanation as to why it would go into a holding account at Barclays.

A number of the smaller banks or building socities use the larger banks for their clearing transactions and then move the money into the account afterwards. It may or may not be the case here. It would not be the fault of the sending bank.

zxspeccy

dunstonh wrote: »

A number of the smaller banks or building socities use the larger banks for their clearing transactions and then move the money into the account afterwards. It may or may not be the case here. It would not be the fault of the sending bank.

This is true. To call yourself an Bank you need approval from the Bank of England, but you do not necessarily need to have your own processing departments and instead use a bigger bank to process you work for you (cheque clearing, CHAPS, Foreign payments, etc). So as Metro is a new Bank they may be using Barclays to process their work. According to the UK Payments Admin website it doesn’t appear that Metro customers can send Faster Payments, so I wonder if they can accept them. Either way it shouldn't take this long for the payment to credit, so I believe someone has messed up somewhere but do not believe it would be the fault of the sending bank.

Dr_Cuckoo3

Metro Bank sort code 23-05-80

Dr_Cuckoo3

htcopp wrote: »

Can I get compensation for the following:

I made a faster payment for a bill, which was successful according to my statement.

So, I was shocked to receive a fine and a late notice from the recipient. I queried this with my bank and they assured me that the payment was made over a month ago.

However, after investigation, it turns out that my bank had been holding the money and have only just sent the payment to the recipient.

htcopp wrote: »

and that the holdings account was not related to my bank, but belonged to Barclays bank....which isn't even the beneficiary bank...they bank with Metro bank.

Who's your Bank ?

I doubt that Metro Bank offer "collection accounts" or accounts to any businesses who charge for "late payments" because Metro Bank is a small new bank

You say they bank with Metro bank (rather than you and do not state who you bank with)

noh

Dr_Cuckoo3 wrote: »

Metro Bank sort code 23-05-80

20-xx-xx to 29-xx-xx Barclays Bank

Therefore Metro use Barclays for clearing.

htcopp

super, thanks guys! that probably explains why the money got held up there!