Citi bank has created a phantom O/D without my permission, what can i do?!?

cl_steele

Lon story short;
a large debit was due to hit the account and there were insufficient funds and i did not have any form of overdraft facility [in fact they had declined me one just a month earlier] but due a system glitch with their back office the debit went ahead and erased all money in the account and created a £4000 unauthorized overdraft which i only found out about when i tried to use my card...
Now two quick questions;
1] Are they allowed to do this?
2] Do i have to pay them back?
Bear in mind that when i ran them all they said was yes it is our fault but you still have to credit the account [at which point i told them to do *ahem* themselves] this is a £300 a year account and their handling has been offensive to say the least every time ive run them i either hear 'we're investigating' [despite telling me what happened] or to credit the account...
So far its blown my credit rating to hell as several cards and bills have been unpaid for over a month now and i've also had a credit card cancelled due to them.
They seem intent to do nothing, I would like my money back and to close the account but can do neither at the moment has anybody got any ideas for what to do? So far i've been told by various friends to either speak to the ombudsman or seek legal advice..

January2015

If you only put £300 a year into the account why did you organise for a 'large debit' to come out of the account. Over £4k is a large single transaction to put through any account but especially one you only use for £300 a year.

All that aside - yes you owe them the money if you requested the transaction. Their system may have 'glitched' but they paid the transaction so you owe them. If they hadn't paid it, you would have owed someone, or some other company the £4k I would imagine.

Of course, if you did not request the transaction and they made an error - then they will need to reverse the transaction.

DCFC79

Well swearing at the call centre operator is really going to help you isn't it.

sourcrates

Hi,

So you authorised a payment you knew would, normally be declined, but because of a technical glitch, it was debited from your account, even though you knew you did not have the funds to cover it ?

What money do you want back exactly ?

Normally I'm on the side of the debtor, but I'm struggling here to be honest.

To my mind you are 50/50 to blame, I'm afraid you are now liable for this money !!!

cl_steele

The account costs £300 a year it is not credited £300 a year.

As for the debit in question it was supposed to bounce off and was oin to be manually paid from another account.

The money I want back is what was in the account to start with.

I didn't literally swear at the call operator its hardly her fault, it was a metaphorical thing.

disregarding morals you have seemed to have raised regarding honoring a payment my question is very simple; legally are they allowed to create such a grotesque OD without permission and then proceed to ive me the run around for weeks on end?

either way suffice to say under what obligation can i be made to pay a debt i did not create, they were not allowed to create and as i said had even said so to that point.. not to mention the snowball effect of hundreds of pounds worth of chares/fines/atm fees etc. etc. thanks to this.

DCFC79

Yes it's blown your credit rating to hell.

cl_steele

sourcrates wrote: »

Hi,

So you authorised a payment you knew would, normally be declined, but because of a technical glitch, it was debited from your account, even though you knew you did not have the funds to cover it ?

What money do you want back exactly ?

Normally I'm on the side of the debtor, but I'm struggling here to be honest.

To my mind you are 50/50 to blame, I'm afraid you are now liable for this money !!!

The debit was not supposed to go throuh as per policy it should have been rejected, their system litch occurred at the exact time the debit hit the account so the system didn't check the balance.
also it's worth mentioning the debit was not as such authorized but on a repeating DD that i unfortunately did not cancel in time since they claim the money several days before the technical due date [god bless American companies]

Siamese

1) Yes
2) yes

When you say you want your money back I assume you mean the money that was in there before the large debit was applied? If so that's no longer yours or the banks money. You'd have to get it back from the person or company that took it (presumably you authorised this?)

All this assumes that the money wasn't taken fraudulently, of course

cl_steele

DCFC79 wrote: »

Yes it's blown your credit rating to hell.

Remind me how I have blown it? im not the one who disabled an account due to faulty software and have still to finish their investigation to resolve this despite assuring me they would contact me numerous time in the past weeks...

Siamese wrote: »

1) Yes
2) yes

When you say you want your money back I assume you mean the money that was in there before the large debit was applied? If so that's no longer yours or the banks money. You'd have to get it back from the person or company that took it (presumably you authorised this?)

All this assumes that the money wasn't taken fraudulently, of course

Technically the debit was authorized however it should never have been allowed through, an unaranged OD of say £200 fair enough but £4000... in what world is that reasonable?
No i more want the money i paid for the account back, you pay for the service and not to have your personal banker ignore you to boot...

sourcrates

You do have a point actually, they should not of allowed such a large transaction to of occurred, putting you into such a large unauthorised overdraught.

Assuming you have complained about this, and they are yet to give you there final responce, I would think it may end up with that payment being reversed.

Your only option, should that not be the case, would be to go to the financial ombudsman, and see what there take on it would be.

Karonher

"As for the debit in question it was supposed to bounce off and was oin to be manually paid from another account."


Can't the £4000 be transferred from the account you were going to manually pay it from? That is what I do when I know a bill is coming out of an account that has run low.

If money has come from one account rather than another why have you not paid your card bills from the account that has the £4000 in it?