Help please!!! transferred £300 into the wrong account.

BlindLeadingTheBlind

This just sounds to me like some banks/orgs are making various uses of the account payee's name field because it is otherwise a wholly redundant field! ('scuse the pun). It is however interesting that the detail included does appear to be transferred to the receiving bank. So could someone please confirm for me whether or not the system discloses to the receiving bank the account payee's name that I originally completed in the on-line payment instruction? (In this case the fraudster's account was with Barclays.)

Gromitt

Correct, the name isn't sent to the receiving bank, that is only for your information. What is sent (from the information you enter) is the bank account number, sort code and reference field.

As said earlier, giving you the opportunity to associate a name with an account number is useful, hence why its there.

JuicyJesus

Gromitt wrote: »

Correct, the name isn't sent to the receiving bank, that is only for your information

Actually, it is. But it's irrelevant. No bank uses it for the routing and receipt of Faster Payments.

The issue is that with the volume of payments sent and received each day, and the massive variation in how banks store customer names and account names, there is no practical way of checking if the names match without manual intervention.

Where payments are received and processed manually, for example by SWIFT (whose volumes are proportionally lower), this doesn't apply. For FPS and BACS it's unworkable.

One thing that may be a glimmer of hope for the OP is that the Financial Ombudsman Service have ruled in favour of the customer where the form for setting up a payment does not explicitly state that the name is not checked and that the payment will go based on the sort code and account number given - I'll dig up the case study for this in a second. It is a long shot, as FOS case studies are not precedent, but a complaint letter stating this to the bank may get a*ses into gear as they will want to save themselves the FOS fee.

(This, incidentally, is the only bit of the whole saga which is the fault of the bank.)

JuicyJesus

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/87/87-banking-complaints.htm

Bottom case study 87/04. Again, just to be clear, FOS case studies are not precedent - they take each case on its merits, however the case studies are a good indication as to the line of thought the FOS take on each case.

Gromitt

JuicyJesus wrote: »

Actually, it is. But it's irrelevant. No bank uses it for the routing and receipt of Faster Payments.

I hope the bank doesn't keep it or store it somewhere that the account holder can retrieve it then, as I remember sending payments to my boss and the name I filled into the "Payee" field was "Nobby".

He has shown his statements, and on there it only ever shows "<my name> <my reference>". Some banks only seem to show the 'reference' field.

BlindLeadingTheBlind

Thank you for this Juicy Jesus. I had already picked up the case from an earlier post from Xylophone but no harm in repeating it for the uneducated amongst us.

As you've confirmed the intended recipient's name is indeed transferred to the receiving bank, could you please advise whether or not the receiving bank would be able to access this information when, for example, they were made aware there was a problem with the transfer and asked to investigate?

JuicyJesus

BlindLeadingTheBlind wrote: »

As you've confirmed the intended recipient's name is indeed transferred to the receiving bank, could you please advise whether or not the receiving bank would be able to access this information when, for example, they were made aware there was a problem with the transfer and asked to investigate?

It depends on their systems, all I know is the information is supplied. The problem for you though is that it's irrelevant - they need the consent of the account holder to deduct the money from their account. Were this not the case, someone could pay for something by bank transfer, say "oops I got the account number wrong" and then have both money and item.

BlindLeadingTheBlind

Am I alone in thinking the system for on-line payments is fundamentally flawed? Banks are encouraging us to use on-line banking with the assurance its safe and secure when it quite clearly isn't!

There is a staggering number of cases out there involving often significant amounts of money which is lost forever to individuals because they've made a simple typo mistake! Or, increasingly, people are falling victims of phishing scams where account details of the intended recipient are swapped with the fraudsters.

Banks have deftly transferred the liability to the customers and no-one appears to be questioning the efficacy of the system which allows huge losses from simple mistakes or enables the success of fraud.

I cannot believe that in this day and age the system cannot be improved to include a check against the account payee's name before the payment is authorised. This could be done without conflict with the DPA. It could be optional so that anyone who believes they are infallible can opt out. Inevitably, there would be a time penalty but I for one believe this would be a small price to pay for peace of mind.

(Please don't reply with the Victoria Smith example. Don't airlines insist on names matching?)

Archi_Bald

BlindLeadingTheBlind wrote: »

Am I alone in thinking the system for on-line payments is fundamentally flawed?

Yeah, probably, you are.

Tens of millions of online payments happen exactly as expected every year. The occasional one gets messed up by the person who sends the money, and most of them will eventually be sorted out. That doesn't make "the system for on-line payments fundamentally flawed".

JuicyJesus

BlindLeadingTheBlind wrote: »

Am I alone in thinking the system for on-line payments is fundamentally flawed? Banks are encouraging us to use on-line banking with the assurance its safe and secure when it quite clearly isn't!

It's only fundamentally flawed if you expect computers to accept incorrect inputs and provide correct results.