Payee Agrees to refund of Faster Payment but Bank keeps money

colsten

Gerard_I wrote: »

The receiving account holder has no benefit - he owed £302 to the Co-op before my erroneous payment into his account, he still owes £302 only now he owes £150 to me and £152 to the Co-op - he doesn't deny that he owes me the money

your logic appears understandable, provided that his Coop overdraft was an arranged overdraft and now stands at £152. Do you know what sort of overdraft he has, and what the balance stands at? If his balance is still minus £302 or more, you'd have a job proving you didn't collude with him, and you will have a job proving that it is your £150 that they have taken from the recipient.

Gerard_I wrote: »

but he is having considerable financial difficulties at present and cannot pay me - and has no idea when he might be in a position to do so.

if he is so hard up that he cannot find £150 now or over the next month or so, it is understandable that the Coop won't any longer extend any credit to the man. You are not owed money by the Coop, you are owed money by the guy you sent the money to. It is his problem to find the money, his problem to negotiate with the Coop, not yours.

The Coop T&Cs might help him, if indeed he is looking for any help. They can be found here. They are very similar to the ones Archi Bald posted earlier, but the Coop terms say they will remove money mistakenly paid in. It's confusing though what would happen if any required overdraft would not be granted.

4.5 If a payment is fraudulently or mistakenly paid into your account, the amount of the payment will subsequently be removed from your account. This may be the case even if you have used all or part of the money. If removal of the payment from your account would either make your account go overdrawn or over an agreed overdraft limit, this will be considered an informal request to access our overdraft services in accordance with condition 13.

4.6 If you or the sender ask us to assist in recovering funds where an incorrect Unique Identifier has been used, we will use our reasonable efforts to do so and may charge you our reasonable costs for this.

Gerard_I

eskbanker wrote: »

However, if in this particular case the reversal would simply return the recipient's account back to the position it was in before the misdirected payment went in, that would seem to me to be a slightly different situation from those envisaged in the above posts.

That's a good point eskbanker, I can see why banks need to have the ability to deny repayments if there is evidence of fraud, or to delay/deny repayments if there is a suspicion of fraud, or even if the receiving account holder withdrew the money before the repayment could be actioned, leaving insufficient funds in the account - but to deny repayment of a credit made in error because the bank themselves have in effect 'pocketed the dosh' themselves does not strike me as fair practice.

colsten

eskbanker wrote: »

To a certain extent we're all just speculating

Agree. Without seeing the transactions in the recipient's account, without knowing what OD arrangements the recipient had, and without knowing why his account is in the process of being closed down, it is quite impossible to judge whether the Coop position is reasonable or not.

I still think, though, that the OP's claim is against the recipient, not against the Coop.

Gerard_I

colsten wrote: »

your logic appears understandable, provided that his Coop overdraft was an arranged overdraft and now stands at £152. Do you know what sort of overdraft he has, and what the balance stands at? If his balance is still minus £302 or more, you'd have a job proving you didn't collude with him, and you will have a job proving that it is your £150 that they have taken from the recipient..

Many thanks colsten - for the info and for the link - I will pass that on to the recipient account holder.

He is basically trustworthy, but from what I hear is having a very hard time (loss of job, various debts apart from his Co-op overdraft and so on) - I feel guilty for adding to his woes as a result of this.

From what I can glean from him it was an agreed overdraft of £300 but the balance (before my payment was received) was £302 and has been for some considerable time. He hasn't been too clear (not I believe from a lack of willingness but simply because he doesn't quite know) if the fact that he went £2 over the agreed limit that the status of the overdraft changed from 'agreed' to (un-agreed? or whatever the correct term would be) - as I understand the matter it went from £300 to £302 as a result of charges applied by the Co-op.

They are not (apparently) continuing to add charges as he is in negotiation with them with the help of a debt management charity in order to address the debt - which in a way means I'm more galled by the Co-op's behaviour in this case - it's not as of he's 'done a runner' and left a debt behind him, he tells me that he is in frequent touch with them and they know the score.

So, to summarise, he had a debt to them of £302 before my c*ck-up, £300 of which was (at least at one time) an agreed overdraft. In their second letter to him they quote his current overdraft at £152, so it is clear that the reduction is due to my erroneous deposit. From what you've said this at least seems to be a good thing, as it is clear that the overdraft has been reduced purely as a result of my error.

Gerard_I

colsten wrote: »

Agree. Without seeing the transactions in the recipient's account, without knowing what OD arrangements the recipient had, and without knowing why his account is in the process of being closed down, it is quite impossible to judge whether the Coop position is reasonable or not.

From what I'm told (and I believe him) there has been no activity on the account for over a year, He has no cheque book or cards for the account and no access to Internet banking for it - his sole aim is to close the account as soon as possible and move on - hence his on-going negotiations with the Co-op with the help of one of the debt management charities.

colsten wrote: »

I still think, though, that the OP's claim is against the recipient, not against the Coop

I rather fear this is the line that will be taken by the Co-op when push comes to shove, in fact they seem to have already taken it - whether or not my bank will offer any further help or just send a letter saying (in effect) 'request denied, eff-orf' remains to be seen.

I suppose my feelings of being aggrieved by the Co-op arise out of the fact that I do feel that the Co-op have offset their debt at my expense. It all depends (I guess) on who is deemed to own the money at any given stage of the process.

I owned the money to start with that would seem to a given

When I transferred it to his account does that mean he (the account holder) owns the money immediately on receipt? - If yes, then I would agree that my complaint would solely be against him and not the Co-op. As if that were the case then the Co-op took *his* money to offset his debt to them

What is in doubt here (to my mind at least) is the fact that given what we've seen in the various official guidelines via the link from eskbanker and the various T&Cs from Archi Bald and colsten, it is definitely not the case that the account holder of an account which receives a payment is deemed to become the owner of the funds transferred in that payment purely as a result of the payment being received into his or her account.

The 'official' guidelines at the link given by eskbanker (which are voluntary but both the Co-op and my bank are on the list of those who have subscribed to them) clearly state that the funds should be returned if they were paid in error, and this is endorsed in the T&Cs we've seen

There is no dispute from any party that in my case the payment was in error. So if the recipient account holder does not inherit the right of ownership purely as a result of the act of receipt of a electronic payment (which they clearly don't, as is clearly expressed in both the guidelines and the T&Cs) then my question is what right do the Co-op have to retain ownership of the money.after they have been informed by my bank that the payment was made in error?

Had the account holder withdrawn the funds or otherwise explicitly re-allocated them of his own accord to any third party, including the Co-op, then I would hold him solely responsible, as this would mean that he had made an assertion of ownership (albeit a false one) - but he didn't do this. By the time he became aware of the matter the funds were already beyond his reach as the Co-op had used them to offset part of his overdraft. But as the money was never rightfully his in the first place, a fact which he does not deny.

The issue for me effectively comes down to: by what right do they (the Co-op) retain the money after being informed that it was a payment made in error? It would not be acceptable for a customer to do this - this is clearly stated in the guidelines and the T&Cs - so why is it acceptable for the Co-op to do it?

Hanky_Panky

What's complicating this for you is the fact that the recipient is in the do-do financially. If he weren't the bank would most likely refund the payment and even if it resulted in an overdraft (because he'd spent it) they'd deal with it separately.

As it stands they have received a payment to an account that from your posts hasn't received a credit for over a year. They will be thinking 'thank God for that!'.

I don't think you'll get it back - sorry.

Hanky_Panky

Gerard_I wrote: »

From what I'm told (and I believe him) there has been no activity on the account for over a year, He has no cheque book or cards for the account and no access to Internet banking for it - his sole aim is to close the account as soon as possible and move on - hence his on-going negotiations with the Co-op with the help of one of the debt management charities.



I rather fear this is the line that will be taken by the Co-op when push comes to shove, in fact they seem to have already taken it - whether or not my bank will offer any further help or just send a letter saying (in effect) 'request denied, eff-orf' remains to be seen.

I suppose my feelings of being aggrieved by the Co-op arise out of the fact that I do feel that the Co-op have offset their debt at my expense. It all depends (I guess) on who is deemed to own the money at any given stage of the process.

I owned the money to start with that would seem to a given

When I transferred it to his account does that mean he (the account holder) owns the money immediately on receipt? - If yes, then I would agree that my complaint would solely be against him and not the Co-op. As if that were the case then the Co-op took *his* money to offset his debt to them
I think once you've transferred it then yes, it's his.

What is in doubt here (to my mind at least) is the fact that given what we've seen in the various official guidelines via the link from eskbanker and the various T&Cs from Archi Bald and colsten, it is definitely not the case that the account holder of an account which receives a payment is deemed to become the owner of the funds transferred in that payment purely as a result of the payment being received into his or her account.

The 'official' guidelines at the link given by eskbanker (which are voluntary but both the Co-op and my bank are on the list of those who have subscribed to them) clearly state that the funds should be returned if they were paid in error, and this is endorsed in the T&Cs we've seen
All bets are off on this one as the account is 'delinquent'. Standard rules do not apply.

There is no dispute from any party that in my case the payment was in error. So if the recipient account holder does not inherit the right of ownership purely as a result of the act of receipt of a electronic payment (which they clearly don't, as is clearly expressed in both the guidelines and the T&Cs) then my question is what right do the Co-op have to retain ownership of the money.after they have been informed by my bank that the payment was made in error?
Irrelevant - sorry.


Had the account holder withdrawn the funds or otherwise explicitly re-allocated them of his own accord to any third party, including the Co-op, then I would hold him solely responsible, as this would mean that he had made an assertion of ownership (albeit a false one) - but he didn't do this. By the time he became aware of the matter the funds were already beyond his reach as the Co-op had used them to offset part of his overdraft. But as the money was never rightfully his in the first place, a fact which he does not deny.

Irrelevant as see above, his money.

The issue for me effectively comes down to: by what right do they (the Co-op) retain the money after being informed that it was a payment made in error? It would not be acceptable for a customer to do this - this is clearly stated in the guidelines and the T&Cs - so why is it acceptable for the Co-op to do it?
As I mentioned all bets are off as the account holder has had his overdraft called in.

Just to add to my previous post.

Reading this you are quite naturally aggrieved and looking for every possible avenue you can I'm just not sure you'll get anywhere.

jonesMUFCforever

First post OP states that recipient was closing account that funds had been credited to - how could this be if it was overdrawn??

anoncol

Money-Saving-King wrote: »

I always do the £1 test and have been fine. If like me double and triple checking isn't enough, I want to see a test payment has gone exactly where I want it to before I send a larger amount.

Indeed, and there is nothing wrong with being very careful with your money. It might be what fraudsters do, but its also what careful innocent customers do to!!