standing order recalled

Fredd_777

Hi I need some advice and help.
Person A set up a standing order and its been paying person B for years. Person A claims she cancelled the S/O in March but it paid Person B in April. The money was sitting in Person B's account for days (over the bank holiday period) and then the money was recalled and taken out of Person B's account without Person B's permission and Person B wasn't informed. My understanding is that once the money is paid, you cannot go into someone's account and just take it. When I went to the bank they couldn't give me any information apart from it has beed recalled (days later) and I would need to get in touch with Person A. I asked my bank (bank of Scotland) what would of happened if I had taken the money out. The bank's response would be that I would be in a negative balance which would occur charges (no doubt).

Is this correct? Do I not have any control over this? Does a 3rd party bank have the power to go in and take the money out? Can anyone help.

Thanks in advance

~Beanie~

Standing orders can be recalled, yes. When I last worked in a bank, you could only recall the same day they went out or the following morning.

The problem here seems to be that it was in person B's account for 'days' because it was the bank holiday period and these were non working days.

pqrdef

Banks generally claim the right to recall their own mistakes at any time.

This puts payees in an impossible position, because they often have no way of knowing that the payment was a mistake. But you don't expect the banks to care about things like that.

grumbler

If it's a customer's error, then yes, your permission is needed.
However, if it's a bank's error, they seem to do whatever they want and to think that they are the law in themselves.

jonesMUFCforever

I think a lot depends on whether Bank a and Bank b are both the same bank.
If this is the case I can see it happening.

I didn't think the recall of standing orders can be done anymore as they are all sent as faster payments.

We also need to know that this was a private standing order not a regular payment from the benefits agency.

It looks to me that prima facie the customer that had the money ''recalled'' has a case to make a formal complaint.

jackjones01

I thought s/o was sent via faster payments now and it was not possible to recall them.

Goldiegirl

As Beanie says, bank standing orders can be recalled, but not days later.

If an error has been made, the bank can request the money back immediately. So the money would go into person B's account and be reversed out on the same day.

However, if the error wasn't realised until after this time scale, person A's bank should refund person A as soon as it is realised that an error has been made.

Person A's bank would then ask person B's bank for the money back. Person B's bank would then liaise with person B about the return of the funds to bank A.

That's how it should work.

If bank A can't get the money back, they would ultimately make a loss if they had made an error.

Goldiegirl

jackjones01 wrote: »

I thought s/o was sent via faster payments now and it was not possible to recall them.

If it's the type of faster payment that leaves the account on day 1 and gets to the bank on day 2, a recall can still be done.

But I don"t believe a 2 hour FP can be recalled

JuicyJesus

Goldiegirl wrote: »

If it's the type of faster payment that leaves the account on day 1 and gets to the bank on day 2, a recall can still be done.

But I don"t believe a 2 hour FP can be recalled

Faster Payments can be recalled in the case of fraud or bank error. But not customer error (hence why those who don't check account details before sending have a pain in the neck getting their money back.)

The reason they can recall in the case of bank error and not customer error is simple - the bank has a responsibility to put its customer back into the position they would have been in had it not made the mistake, which they can effect through various interbank channels. That means the beneficiary not receiving the money, since they should never have received it in the first place. They have no such responsibility to account for customer inaction or error.

There is also the fact that the bank cannot recall a payment just on a customer's say so. Were that the case any valid Faster Payment based on a customer instruction could be recalled based on "I got the account number wrong", which would destroy the point of the system being of cash transfers and also end up with the banks being piggy in the middle of a whole heap of disputes as to who should rightfully have the money.