Faster Payments & Solicitor Gouging

jparrie

So my solicitor tells me that I will have to pay £35 to have the proceeds from the sale of a house sent to my bank via TT.

"Why?", I ask?

"OK", they say, "we can send it via BACS for free, but it won't get there for 3 days".

"What about Faster Payments?", I ask

"We don't use it", the say.

"Why not?"

"Because.....we don't".

"Well, I'd like you to use it because it is available to you and it is quite cheap compared to TT, and is very quick", I say.

"OK, well in that case we will have to charge you a fee of £20+VAT"

"Why?", I ask.

"We have to take into consideration the time it takes our staff to effect the transaction", they say.

"So", I ask, "Why does it take any longer for your staff to make a BACS payment than it does a FP payment?"

"Errrrrr.....", they say.

"And how much do you pay your staff? Let's say £12 an hour for a junior secretary, so for 5 minutes that's £1, and yet you want to charge me £24?"

"Well, that's what we charge, take it or leave it, what do you want to do?"

Solicitors, don't you just love them? They use any and every opportunity to gouge customers of a few quid here, a few quid there.

I hate them all.

junglejame911

Did you join MSE just to get that off your chest?

I don't like them either if that's any consolation.

WestonDave

One common reason for not using Faster Payments is that its an additional option within some of the banking systems that you have to register for. (Bear in mind because solicitors are sending high value amounts via CHAPS they have a different level of access via the banks internal systems rather than an internet banking style log in). Faster Payments is a bit of a pain for businesses - yes its instant but you can only load one payment at a time and its hard to store details - by contrast most salaries for example are sent by BACS because you can load a number of payments into a pre-stored template. Similarly you might have all your suppliers bank details set up in a template so when you want to pay them you just add the sum to pay. Faster Payments is really a consumer product not one that works well in a bulk payments scenario.

As for your suggestion that a junior secretary sends the payment - presumably if it went astray you'd be complaining that the person in charge hadn't taken it more seriously and checked themselves or given the task to someone more suitable. The 20% on top is the governments fault!

Freecall

I think that we should not fail to recognise the importance of customer perception here.

At one time, many years ago, payments between solicitors were arranged by notes of exchange being physically shipped between firms and their banks. Then, with the introduction of the electric telegraph, this was automated and could be done remotely. Later on came CHAPS which gave universal transfers between participating companies.

The thing is that all of these methods are seen as 'special' in some way and clearly add value to what is being done. It follows that paying for them is reasonable.

Now we have an age where individuals can transfer money instantaneously between bank accounts and therefore we do not perceive that any value is being added and we feel ripped off.

The real added value lies in the fact that the solicitor is ultimately taking responsibility in case things should go wrong.

Maybe that is worth £35?

innovate

CHAPS is designed to shift large sums of money on a single day. BACS can do the same but it takes 3 days. Faster Payment is designed to shift smaller amounts (absolute max is £100K but many banks have much lower limits) within 1 day. It is not surprising that a Solicitor doesn't offer Faster Payments.

atypical

WestonDave wrote: »

Faster Payments is a bit of a pain for businesses - yes its instant but you can only load one payment at a time and its hard to store details - by contrast most salaries for example are sent by BACS because you can load a number of payments into a pre-stored template. Similarly you might have all your suppliers bank details set up in a template so when you want to pay them you just add the sum to pay. Faster Payments is really a consumer product not one that works well in a bulk payments scenario.

This isn't a limitation of the Faster Payments Service but of a bank's internet banking platform. It is possible to make bulk payments via template and via files sent directly to the scheme.

Below is guidance to solicitors on these kind of fees (should be explicit in stating what makes up the fee):
http://www.lawsociety.org.uk/advice/practice-notes/telegraphic-transfer-fees/

Thrugelmir

jparrie wrote: »

So my solicitor tells me that I will have to pay £35 to have the proceeds from the sale of a house sent to my bank via TT.

"Why?", I ask?

A high % of the £35 will be the banks own charges. Nothing what so ever to do with the solicitors office.

doe808

Thrugelmir wrote: »

A high % of the £35 will be the banks own charges. Nothing what so ever to do with the solicitors office.

Yeah-the majority will be the banks charge.

But, hey, lets not let the facts get in the way of a good moan :rotfl: