Bank Compensation - Credited in error ?

cjdl_2

Hi All,

Just wanted to get a bit of advice / opinion on what to do with this... firstly, let me preface this post with the fact that I'm not trying to get free money !

Today i discovered that RBS have credited £410 into my current account, labelled 'COMPENSATIONS'. I'm convinced it's an error.

I have a few open complaints with them, one going back a few months that hasn't really been sorted, another about a month back, and another (related) from about a week ago.

I haven't really been chasing the complaints, just made them and left them to get on with it - but i keep getting letters saying they are still looking into them... etc etc...

So, I called the bank today, told them of my concerns, and the bank have basically said it's legit and the money is indeed mine. What they also said is that it's likely to be a settlement for all of my complaints combined together, because the note on it is 'compensations' (plural) rather than the normal 'compensation' (singular).

Personally, i'm still convinced it's an error because the amount is SO disproportionate to the errors and the hassle / inconvenience caused to me - but a friend of mine who works for a bank has said that the amount doesn't surprise him as banks are throwing vast sums at customer complaints just now.

I am aware that if you receive money in error you (legally) cannot just spend it, it can be seen as theft - particularly if you believe it to be in error.

But, given that i have queried it, have a 'reason' to have received it, and have had confirmation from the bank that it's legit (these calls should be recorded, yes?) ... can I keep it / spend it ?

I'm thinking of sticking it in my ISA and leaving it there for a while, just in case - but it would be awesome if it could pay off a large chunk of my credit card !

Thanks for any thoughts !

Cheers,
Chris. :j

innovate

Agree, £410 for several complaints, and where they admit error, isn't out of the ordinary. Nor should it be - - compare it with the huge sums they charge you if you make a mistake with your money, e.g. going overdrawn inadvertently.

Have they settled all your complaints satisfactorily, or are they just trying to shut you up with money? If any are still open, make sure they know you expect them to be settled properly (and if necessary, with further compensation).

You called them and they said the money is yours, so it's yours. If you feel better to have a confirmation in writing, ask them to send you a letter.

Putting the money into a savings account in the meantime is certainly a valid option. Whether this should be your ISA is a different question - - if you had to repay the money, you'd have to withdraw it from your ISA and lose £410 of your entitlement. Not an issue if you don't think you will reach your ISA allowance, and it's only a tiny small risk, anyway.

zxspeccy

Any complaints would be logged on the RBS Concerns system, so you should have a reference number for each any every complaint you have raised. In addition if you are not chasing the bank about these complaints they should at least be contacting you to update you with the progress.
RBS deal with redress in three difference ways:
Refunds - includes interest and charges that have been past to you account due any bank errors.
Reimbursement – out of pocket or third party expenses that have been incurred, for which the bank may or may not require proof.
Compensation – payment for the distress/incovenience caused.

It is difficult to establish whether the £410 compensation payment is too big or too small without know specific details of your complaints. However compensation payments have to be agreed by you first before the bank passes them to you account, and only in exceptional circumstances do they pass them without your approval.

A way of getting to the bottom of this is to ring the bank, ask to speak to the Concerns Team and provide them with all your complaint reference numbers. The bank can then go through these one by one to see if the cases are still active or close. If they are closed then the closing notes should include details of any financial redress, if they are still open then they can provide you with an update of where they are with the case.

I do find it very surprising that these funds were past to your account without your prior knowledge, so I would recommend contact the bank again.

Let us know how you get on.

cjdl_2

Thanks for the quick replies guys... the complaints:

Firstly, there was some sort of bizarre system error which locked me out of my current accounts... so i had to use and withdraw cash from my RBS credit card instead.

They eventually refunded me the charges & interest I incurred on my credit, but I told them I wanted an explanation as to what caused this and an assurance that it wouldn't happen again. This was to be investigated, and come to think about it, i haven't heard anything more about it (months now).

Second one was with regard to the Santander switch. I'm based in Scotland, but my business account is being switched as it's a business direct account. I went ape$h!t, as you can imagine. I went to branch, and was told that a business manager would contact me to arrange changing to a Scottish branch based account, so avoid the switch. This never happened. I complained about that, again, haven't heard much more about it.

Then, last week, they switched my business account to another customer ID number in preparation for the Santander switch. At the same time my (personal) RBS credit cards just 'disappeared' from my online banking. Took me a while, but eventually found out that they'd been transferred to the new customer ID number as they are ALSO being switched to Santander.

Now, AFAIK, RBS aren't selling CCs to Santander, so again i called up, and this time blew a few gaskets and complained to several different departments (Banking, CC, Business Banking, and the Santander Switch team)... turns out because CCs are not branch based, they get dragged along with any accounts that ARE being switched because they're linked to the same 'customer ID'. It's an error, and they say they don't have any way to fix it...

Effectively i need to close my business account and open a new one, and i need to pay off and close both of my personal CCs with RBS and open new ones.

So, with all of that lot in mind... doe £410 sound reasonable ? It still seems excessive to me. Though I suppose the 'compensation' amount probably depends on how much they value me as a customer ?

Will contact the concerns team as you suggest and see what's happening with those complaints.

Thanks again.
Chris.

stclair

It will be for your complaints you have raised well at least one of them.

They have a tendency to give you the compensation then send you a letter so im sure a letter will follow.

cjdl_2

Quick update to close this off... i did eventually receive a letter from the bank.

I had another complaint I forgot about... when RBS changed the terms (& names) of their paid accounts I decided to discontinue my Royalties Account, and downgrade to the standard account - i had only take out Royalties for the mobile phone insurance, the terms of which were no longer favourable.

I had visited a branch in December asking for this to happen, had a discussion about it, and was told someone would call me back (i'd asked if they could upgrade to Royalties Gold for same fee). Nobody called back.

The price increase and name change happened on, IIRC, 17th Jan, I'd forgotten about it until I saw the increased charge on my statement in March, called on 3rd March and account was downgraded then.

I asked for the additional fees to be refunded, given that I'd previously asked for the downgrade, so around £12.

The letter states that because of the time taken to respond to the complaint, the £410 compensation is for the additonal fees incurred, and the "inconvenience" caused to me because of this !!!

£410 compensation because of £12 of fees ?!?!? Are they MAD ?

I'm not complaining (of course ), but... no wonder the banks are skint ! Unbelieveable !

Cheers for the replies !
Chris.

zxspeccy

Thanks for the update, I am glad it is all sorted and you can now spend (or save) the money safely.

Unfortunately the banks have to pay out large compensation amounts at the moment, and that is mainly due to the FSA and FOS. Banks are being heavily fined for not dealing with customer complaints properly (PPI is a high profile example). More and more customers are going to the Ombudsman, which is costing the Banks £millions to cover the fines and fees. It is therefore cheaper to provide these generous payouts to stop customers going to the Ombudsman. The bank has to pay the Ombudsman for the privilege of the investigation, and even more money if they ultimately find in the customer’s favour.

The compensation payment you received is not due with the amount of the error, but mainly the time it has taken to get things sorted. It would appear that somebody at the bank has not dealt with your complaint properly. You raised it originally in December 2011, and had to chase the bank in March 2012 so you had to complained about the complaint not being dealt with. I would say the £410 is “reasonable” and “fair” given the information you have supplied.