Is it normal for Santander to delay every faster payment sent?

Caladan

jamesd wrote: »

It's in a number of places:

1. Payment Services Directive, article 74 (2):

"(2) Where the unique identifier provided by the payment service user is incorrect, the payment service provider is not liable under regulation 75 or 76 for non-execution or defective execution of the payment transaction, but the payment service provider—
(a)must make reasonable efforts to recover the funds involved in the payment transaction"

2. The payment recall procedure in SEPA edition 4.

3. The datalink file spec for Faster Payments: "Appendix 3 – Field 126 – Return Codes
As the name suggests, Returns are the return of a previously sent outward Faster Payments. They can only be received into an account that was used to make the original payment", some values of which are:
"00000006 Beneficiary Account Name does not match Beneficiary Account Number"
"00000007 Return requested by sender of original payment"
"00000009 Beneficiary not expecting funds/instructed return"

So at least in theory, there should be both best effort made to recover and support in the system for both recalling payments and returning unexpected payments, since provisions for this are available.

However, as you know, the PSRs require mandatory stopping of payment support and it took several years before institutions implemented systems to do this, notably for recurring payment authorities.

Well, that is the common industry position, but I have reservations about whether it is an accurate reflection of the obligations under the PSRs and a full use of the facilities provided for in the FP spec.

I almost always do this, including when I'm trying the first transfer between newly entered accounts of my own. A low value initial payment should, if customers are prudent, be of decreasing value as a way to differentiate between legitimate and illegitimate payments. The more the institutions emphasise lack of recall capability, the stronger the incentive and education of customers that they must always do a low value payment first becomes.

You should expect the guidance to always do a low value payment first to be ubiquitously given here, and elsewhere. It's a lot less painful to have £1 going missing than much more and anyone can get account details wrongly typed, including in a way that passes modulus checks if you get unlucky.

If institutions dislike this and want to preserve what remains of the value of a low value payment as an indicator of possible fraud they must provide some other way out for consumers. That can be better error checking of account details, recall, some combination or anything else that can credibly reassure consumers that it is not prudent to make low value payments first. At the moment there's a steady stream of media coverage about people losing money, not about them being protected.

Thank you, a very insightful post. I'll have a look at our procedures again when I'm in the office next. I can't see recalls being an option for the reason I gave earlier (the example of selling a car) but there must indeed be a way forward with this.

JustAnotherSaver

innovate wrote: »

That is well within the max time allowed. FPs must arrive by the end of the next business day.

I'm not saying it isn't

All i'm saying is i've never had any issue with Halifax, Nationwide, TSB, First Direct. Santander has frequently been the slowest. Co Op were bad when i was with them too.

jamesd

Caladan wrote: »

I can't see recalls being an option for the reason I gave earlier (the example of selling a car) but there must indeed be a way forward with this.

One potential route in some circumstances might be the notice, take-down and counter-notice provisions in the DMCA. Provided the originating bank customer is in good standing, that bank might presume that it is likely to be a genuine request and send notice that the destination uses to trigger a notification of intent to reverse to their customer. That'll still produce some conflicts but false counter-notifications would be an indication of more likely fraudulent intent by the recipient that might discourage such games. Time delay can also be a useful technique, since much fraud relies on acting before there is a chance to realise a problem. In the car case the money would perhaps end up in a suspense account for some time while one of both institutions sought confirming/conflicting evidence from their customers. Near misses from apparently intended destination account numbers and sort codes could also help to identify claims that are more likely to be genuine, while having a lower probability of affecting random car purchases.

It'll be interesting to know what you can say about whatever you discover.

jamesd

JustAnotherSaver wrote: »

All i'm saying is i've never had any issue with Halifax, Nationwide, TSB, First Direct. Santander has frequently been the slowest. Co Op were bad when i was with them too.

While I've on more occasions spread in time had issues with Santander, most frequent was First Direct, at a time when there were transactions that I could understand being regarded as unusual. That triggered unusual delays above certain transaction values. My response was to contact FD and ask them, without telling me whether they did it or not, if security was involved, to convey to them my invitation that they contact me so I could help them to understand the purpose and other details of the transactions and discontinue them if they still had concerns. A few days later I was contacted and provided the information needed to understand what was happening. FD said discontinue that type of transaction, not something that surprised me since they were quite frequent and quite high value for a consumer account. I complied.

I don't recall ever having an issue with NatWest.

Faster Payments can be delayed longer than a day at times, notably when a consent required SOCA notification is about a transaction of concern is made, requiring the bank to wait for up to a week for SOCA to give consent or not.

Sponge

innovate wrote: »

In my experience, it is often (but by no means always) the second payment - - particularly if your first payment is a test payment for, say, £1, just to confirm you really got the sort code and account number of the recipient correct.

Off-topic, I know...

I've done this several times when setting up transfers to friends and family. Like you say, it's good to know the details are correct and reduces the risk of expensive mistakes!

However, I wanted to do it with my Solicitor last May after a house sale/purchase. I wasn't happy with transferring nearly £20,000 without knowing I'd entered the details correctly, nevermind him giving me the wrong numbers - he wouldn't accept it.

He said he won't be checking for the £1 payment and wouldn't let me know if it'd worked or not, so I may as well pay the full amount.

It all went well, but I was still nervous and a little annoyed at his refusal to accommodate my wishes.

ColdIron

I've never had any problems with Santander payments, other than initial £10 trial payments followed by a larger one, but with other banks what I have done in the past is phone them up using telephone banking and request a new payment for the same amount and then get them to cancel the deferred one. Works a treat

pqrdef

Caladan wrote: »

Of course, I could just send the payment as per the customers instruction, entirely disregarding my duty of care, and more fool the customer because it's them that's going to lose out and it'd certainly save me a lot of hassle and work.

Your employer's lawyers are (quite correctly) adamant (on a daily basis) that the bank has absolutely no responsibility in respect of customers getting themselves scammed.

If they wanted to do something, they could block the accounts of scammers. Do you know how hard it is to get Visa to block the merchant accounts of known scammers? So long as they're collecting their fees, they don't give a toss. They make most of their profit from pornography. How much of that is illegal?

Caladan wrote: »

Point 4 - Yes, just setting up a direct debit alone is easy

It's a joke. They set up a system that depends on only trustworthy businesses being allowed to originate DDs, and relies on those firms to check IDs. But the ID checks are laughable. And then they undermine the whole thing by allowing third-party payment brokers to be proxy originators, so the real originator doesn't have to register.

Anybody who sets up DDs knows how often customers give wrong bank details. And sometimes DDs are set up on the wrong account and payments are collected. A properly designed system would make it essentially impossible to do this by accident. (This would also remove the need to make test payments when setting up new payees.)

But there's bad system design everywhere you look. Basically we have to live with the knowledge that the banks leave our accounts wide open, and if there's a fraud they'll do their damnedest to try to claim that we were negligent or complicit before they admit their own liability.

If the banks cared, they would do something. But they're all trained to think that the bottom line is the only thing that matters. Crime is just a business cost. And any losses incurred by the customer aren't even a business cost, so they don't matter a jot.

pqrdef

BusinessIsBusiness wrote: »

Money Laundering Regulations '07 state that if not reported, anyone can liable for being complicit with Money Laundering when it is reasonable to be suspicious.

Well there you go. What I object to is the abuse of the regulations in cases where it's not "reasonable to be suspicious".

The government defines money laundering as "exchanging money or assets that were obtained criminally for money or other assets that are 'clean'. The clean money or assets don't have an obvious link with any criminal activity."

So there would need to be reasonable suspicion that the money was obtained criminally. The fact that a particular transaction is capable of cleaning up dirty money does not in itself create any grounds for suspecting that the money is in fact dirty, unless the transaction is so peculiar that there's unlikely to be any other reason for doing it.

And there would need to be reasonable suspicion that something was going on to clean up the money. Large cash or gambling transactions might do that. Simple electronic movements between bank accounts won't hide anything.

And if laundering is suspected, the next step is to report to the Serious Organised Crime Agency. But no bank will report me, because SOCA would just laugh. I haven't got enough money to be of any interest to them.

To give some sense of proportion, no KYC is required for "occasional" transactions unless the amount exceeds EUR 15,000.

There is no legal obligation on the banks to pay excessive attention to transactions involving insignificant amounts of money.

pqrdef

mrchiggles wrote: »

The software used to do these sorts of checks is very complex and the rules within the software will be frequently changed and adapted depending on the level of fraud threat on that day, emerging patterns of referrals, etc.

I like to have two accounts with a bank, and if they refuse a payment from one account, I make it from the other. Never failed yet.

jamesd

pqrdef wrote: »

They make most of their profit from pornography. How much of that is illegal?

Very little. The extremely widespread consumption shows that it's generally well accepted and hence not sufficient to be illegal. Except where criteria in law are out of sync with the criteria of the consumers or enacted while disregarding what's broadly accepted for political reasons. Or just out of date.