Chaps

Horace_Morris

Hi, I'm new here and have no idea where exactly to post this question as it doesn't seem to fit - but anyway, here goes:

I need to know the definitive answer based on industry regulations as to whether or not a CHAPS transfer is covered by the bank if it turns out to be fraudulent.

In my case the recipient account was with the same bank as my own account, was withdrawn at the other end (in London) and I was ripped off basically. But the bank didn't follow my instructions and sent the money by normal bank transfer.

The Ombudsman says that the bank were entitled not to send the money by CHAPS and that it is "not persuaded" that there would have been any extra security had the money been sent by CHAPS.

I have looked at a site called payyourway and they seem to suggest that a CHAPS payment gone bad is refundable by the bank.

The bank didn't flag the transfer at either end, didn't inform me of the difference between the two methods other than the cost (£25), and questioned at first whether there was even a fraud that had taken place.

They accept it as a fraud now, but laughed at me for suggesting they had facilitated it and claim they opened the recipient account in good faith.

But the Ombudsman has completely failed to base its decision on any specific regulations. I want to know exactly what the regulations say; are they determined by each individual bank as they choose, or is there an industry standard?

It's very hard to find this information, but I really need to know that what the regulations say before I proceed to small claims against Barclays - to try and avoid throwing good money after bad.

Any and all help would be greatly appreciated. Thanks.

Biggles

I can't see how the method of payment comes into it.

You were suckered into making a payment to someone who's run off with the money.

The only question the bank may have to answer (and it's a big maybe) is whether they vetted the person opening the new account adequately. But pursuing the payment method will get you nowhere, I suspect.

Horace_Morris

Well so far that's exactly right, it's got me nowhere.

But then my complaint to the Ombudsman did call into question the security on the recipient account and they have totally ignored that part.

In terms of the transfer method I need access to the actual regulations themselves to see whether or not and it what instances there is security on the various methods. As I said, I am led to believe that payments that go astray (fraud) by CHAPS are refundable.

grumbler

Horace_Morris wrote: »

I have looked at a site called payyourway and they seem to suggest that a CHAPS payment gone bad is refundable by the bank.

http://www.payyourway.org.uk/payments-explained/chaps/

Security

• You will get a refund from your bank if you are an innocent victim of fraud.
• Consumer protection providing immediate refund will apply if you are an innocent victim of fraud – your claim needs to be made within the 13 months of fraudulent transaction leaving your account. Payments require your authorisation in advance and your bank must tell you what information the payment will be processed on (e.g. account number and sort code). If you give the correct information and your payment goes astray your bank must make immediate efforts to trace the transaction and notify you of the outcome. In this case the transaction will be refunded. If you give incorrect information and the payment goes astray your bank must make ‘reasonable efforts’ to trace the transaction but may charge for doing so. However, they have no liability for getting the funds back. Claims must be made within 13 months. Once the money is in their account, it cannot be recalled without the recipeint’s consent.

My understanding is that in this context "fraud" or "fraudulent transaction" is in fact a fraudulent transfer made from your account by a fraudster.

IMO, it is naive to expect any other sort of protection for any bank transfer payment.

Horace_Morris

No offence grumbler but your opinion isn't particularly helpful. And the link you have quoted is the one I've already mentioned in the OP - where it clearly states that if a payment goes astray despite me giving the bank the correct information it will be refunded if I am the innocent victim of fraud.

Just to reiterate, what I am looking for here is the actual regulations, not people's opinions - I've got plenty of those already myself ;-}

matttye

Horace_Morris wrote: »

No offence grumbler but your opinion isn't particularly helpful. And the link you have quoted is the one I've already mentioned in the OP - where it clearly states that if a payment goes astray despite me giving the bank the correct information it will be refunded if I am the innocent victim of fraud.

Just to reiterate, what I am looking for here is the actual regulations, not people's opinions - I've got plenty of those already myself ;-}

You need to read these:

Regulations 59, 61, 75, 76 and 77 of the Payment Services Regulations 2009.

http://www.legislation.gov.uk/uksi/2009/209/regulation/59/made
http://www.legislation.gov.uk/uksi/2009/209/regulation/61/made
http://www.legislation.gov.uk/uksi/2009/209/regulation/75/made
http://www.legislation.gov.uk/uksi/2009/209/regulation/76/made
http://www.legislation.gov.uk/uksi/2009/209/regulation/77/made

Regulation 59 says:

"Notification of unauthorised or incorrectly executed payment transactions

59.—(1) A payment service user is entitled to redress under regulation 61, 75, 76 or 77 only if it notifies the payment service provider without undue delay, and in any event no later than 13 months after the debit date, on becoming aware of any unauthorised or incorrectly executed payment transaction.

(2) Where the payment service provider has failed to provide or make available information concerning the payment transaction in accordance with Part 5 of these Regulations, the payment service user is entitled to redress under the regulations referred to in paragraph (1) notwithstanding that the payment service user has failed to notify the payment service provider as mentioned in that paragraph."

The conclusion that I come to is that the bank only need investigate that a transfer request was executed correctly; in other words, to the correct account and for the correct amount. They do not have any responsibility or liability for the fact that you were defrauded, as YOU were the one who initiated the transfer.

If a fraudster had gained access to your account or cloned your card or something, the transaction would have been unauthorised and you would then have the right to recompense, but because you were the one who initiated the transfer and the transaction was therefore authorised, the bank does not owe you a refund.

Sorry to be the bearer of bad news!

grumbler

Horace_Morris wrote: »

No offence grumbler but your opinion isn't particularly helpful.

No offence taken, but if I were you I'd prefer the opinion to be correct in the first place, not helpful. It makes no sense to ask for 'helpful' opinions that can be incorrect.

And the link you have quoted is the one I've already mentioned in the OP

Of course it is. That's why I quoted you before posting the link. It is you who should have posted the link and the exact quote instead of your vague "they seem to suggest that a CHAPS payment gone bad is refundable by the bank" statement that you have built your entire case upon.

- where it clearly states that if a payment goes astray despite me giving the bank the correct information it will be refunded if I am the innocent victim of fraud.

You misquote it.
"goes astray" means the bank's error that has nothing to do with you being "the innocent victim of fraud" as a result of a fraudulent transfer made by a fraudster.

mulronie

Horace_Morris wrote: »

I need to know the definitive answer based on industry regulations as to whether or not a CHAPS transfer is covered by the bank if it turns out to be fraudulent.

Here's a definitive answer - No.

You are covered for fraud purposes in respect of unauthorised transactions. Payment Services Regulation 55 states:

Consent_and_withdrawal_of_consent wrote:

(1) A payment transaction is to be regarded as having been authorised by the payer for the purposes of this Part only if the payer has given its consent to—
(a)the execution of the payment transaction

Barclays have done nothing wrong because they simply executed a transaction that you had authorised.

They executed your instruction to pay. The method of payment - CHAPS, FPS, Internal transfer, etc - is irrelevant.

If you proceed to court against Barclays you will be throwing good money after bad; they will fight you and you will lose. If the Ombudsman doesn't think you have a case, a District Judge won't either, especially without statute law or case precedent to support you.

Biggles

Horace_Morris wrote: »

As I said, I am led to believe that payments that go astray (fraud) by CHAPS are refundable.

But it didn't go astray! It went to where you asked them to send it.

You have been wronged, HM, but you are attacking completely the wrong target. You don't seem to have mentioned the police, for some reason, I would have started there in the hope they could track down the fraudster.

agrinnall

Horace_Morris wrote: »

...where it clearly states that if a payment goes astray despite me giving the bank the correct information it will be refunded if I am the innocent victim of fraud.

Your only hope is if you can explain how you think the payment has gone astray. You say "...despite me giving the bank the correct information". That suggests to me that you believe they actually sent it somewhere else, is that the case? If so then you are definitely due a refund, but given the level of investigation that appears to have been done then that seems unlikely. In which case, the payment did not go astray at all, and your stating the word doesn't make it so.

jonesMUFCforever

Horace_Morris wrote: »

No offence grumbler but your opinion isn't particularly helpful. And the link you have quoted is the one I've already mentioned in the OP - where it clearly states that if a payment goes astray despite me giving the bank the correct information it will be refunded if I am the innocent victim of fraud.

Just to reiterate, what I am looking for here is the actual regulations, not people's opinions - I've got plenty of those already myself ;-}

The actual regulation is quite simple.
You asked your bank to make a payment on your behalf - they obliged.
The fact that you have been ripped off is not the fault of the bank.
Had you paid for goods by say a credit card and they did not arrive you could ask for a chargeback.

I am sorry to say that your bank will not refund you - they were following your instructions.
Whether it went by CHAPS or internal transfer is immaterial.