MSE News: Sent money to the wrong account? Now it should be easier to get it back

EarthBoy

masonic wrote: »

How 'fuzzy' are you planning to make this name matching? - because people frequently misspell my surname, even after I've gone to great pains to spell it out for them.

Customers have to accept some level of responsbility for getting the details right, instead of blaming the banks for their own carelessness.

masonic wrote: »

It seems like what's being proposed is to rip out the current system and go with a redesign, which has its merits, but I can see the banks being reluctant to replace their infrastructure to accommodate the change - look how long it took them to implement a rather trivial change like faster payments.

I agree with you. My point was to explain that changing the system was possible, not that it was practical. I did say in my first post that the cost would out-weigh the benefits.

masonic wrote: »

I'd predict that initiatives like paym, which put a sticking plaster on the problem, look a lot more hopeful.

Again, I agree. I think PayM is great, but most people I've spoken to don't know what it is. Maybe it hasn't been advertised very well?

SuperAllyB

rtho782 wrote: »

I'm closing my account with TSB over this.

While I get that this is being done with good intentions, the way TSB have phrased the changes to their terms and conditions is scary.

Effectively they remove all certainty of funds from my account. There is no time limit for a reclaim - it could be a decade later - and I have to prove that the funds were not sent in error or I pay back all the money, and any fees for arranged or unarranged overdrafts.

Let's say I sell someone my car today for £5,000. They send me the money via faster payments. 20 years later, they dispute the transaction, and the funds are taken away from me. How do I prove I sold a car 20 years ago?

Hell, even if I sold the car a week ago it could be hard for me to prove. "Here is a photo of the empty space my car would otherwise be in!"

This policy opens up the potential for a hell of a lot of fraud.

I realise that perhaps the bank would side with me in the above cases, but, "perhaps" is not good enough, and I should not have to potentially be without the cash for months while they decide on the dispute.

Worse, the way TSB word it, as soon as the sending bank disputes the transaction, the money is just gone from my account. So they don't even need to be told what is going on, the fraudster does not need to convince TSB, just their own bank.

While I agree with your observations, I don't see the point in leaving TSB. I would imagine most, if not all, of the big banks will sign up to the same code.

There definitely needs to be a period where both sides can argue their case before payments are returned to the sending bank.

colsten

rtho782 wrote: »

I'm closing my account with TSB over this.

You'll have trouble finding any other bank that doesn't have essentially the exact same T&Cs.

rtho782 wrote: »

Let's say I sell someone my car today for £5,000. They send me the money via faster payments. 20 years later, they dispute the transaction, and the funds are taken away from me. How do I prove I sold a car 20 years ago?

Hell, even if I sold the car a week ago it could be hard for me to prove. "Here is a photo of the empty space my car would otherwise be in!"

Get your buyer to sign a receipt for the car. Ask them for proof of ID, e.g. in the form a of a driving licence, take a photo of it.

masonic

EarthBoy wrote: »

masonic wrote: »

How 'fuzzy' are you planning to make this name matching? - because people frequently misspell my surname, even after I've gone to great pains to spell it out for them.

Customers have to accept some level of responsibility for getting the details right, instead of blaming the banks for their own carelessness.

I think you misunderstood the point I was trying to make. Perhaps an example would be more helpful...

Suppose my name were John Chatfeild-Roberts. In your proposed system, someone wanting to pay me (let's, for sake of example, assume this is tax refund from HMRC, since I am a successful fund manager and therefore probably know a few clever ways to reduce my tax bill ), would key in my details into their payments system...

Sort-code: 00-11-22
Account number: 01234567
Surname: Chatfield-Roberts

What would happen? Presumably the payment would fail, right? Because the wrong details were entered? Because they are wrong, aren't they? Congratulate yourself if you spotted that right away. In this case, just matching the first few letters would be successful, but there are other examples where even that would fail. Hence my question, "How 'fuzzy' are you planning to make this name matching?"

Assuming the correct details were in fact provided, the "customer" in this case, who has "to accept some level of responsibility for getting the details right, instead of blaming the banks for their own carelessness", is presumably HMRC, right? But the victim who fails to receive the payment, despite the correct sort code and account number being entered will probably not care whose fault it is. They just want their money and will probably now need to wait for HMRC to contact them for the correct details, then spend forever listening to hold music before finally pointing out that their surname has an unconventional spelling, which they probably did the first time around, but people tend to have a pathological aversion to seeing the actual spelling when they read the name.

So, while I do accept your solution to this problem is indeed technically possible (and you can look to Visa and Mastercard credit/debit cards for proof that such a system that requires both a number and name to be correct), it is far less practical than several alternatives, so perhaps, if we are going to theorise an ideal system to replace the current one, we can do better than this?

dggar

rtho782 wrote: »

I'm closing my account with TSB over this.

While I get that this is being done with good intentions, the way TSB have phrased the changes to their terms and conditions is scary.

Effectively they remove all certainty of funds from my account. There is no time limit for a reclaim - it could be a decade later - and I have to prove that the funds were not sent in error or I pay back all the money, and any fees for arranged or unarranged overdrafts.

Let's say I sell someone my car today for £5,000. They send me the money via faster payments. 20 years later, they dispute the transaction, and the funds are taken away from me. How do I prove I sold a car 20 years ago?

Hell, even if I sold the car a week ago it could be hard for me to prove. "Here is a photo of the empty space my car would otherwise be in!"

This policy opens up the potential for a hell of a lot of fraud.

I realise that perhaps the bank would side with me in the above cases, but, "perhaps" is not good enough, and I should not have to potentially be without the cash for months while they decide on the dispute.

Worse, the way TSB word it, as soon as the sending bank disputes the transaction, the money is just gone from my account. So they don't even need to be told what is going on, the fraudster does not need to convince TSB, just their own bank.

I received a letter from TSB this morning about updates to T&Cs. from the letter:-

We have subscribed to the Payments UK Code of Best Practice on Misdirected Payments. The Code includes a process for banks to follow to help recover money quickly if it is paid into the wrong account. We are adding a new condition to the Personal Banking Terms and Conditions, condition 7.6, so that we can use this new process.

This condition will say that if we find out that money has been paid into your account by mistake, or has been recalled by the bank that made it, we can take up to this amount of money from your account. We don't have to ask you before we do this but we'll let you know if it happens and ask you to tell us if you don't think the money has been paid to you by mistake. You'll need to contact us by the date that we give you. We will consider all of the information provided to us and will act reasonably whenever we are using this process.

If we take the mistaken payment out of your account and it goes into a Planned or Unplanned Overdraft as a result, you will have to pay any charges and interest incurred.

I don't think TSB will act without checking whether you agree a mistake has been made.

masonic

dggar wrote: »

I don't think TSB will act without checking whether you agree a mistake has been made.

"...we can take up to this amount of money from your account. We don't have to ask you before we do this but we'll let you know if it happens" would seem to suggest otherwise. I read that as they take the money, tell you what they've done and then you need to argue your case to have it returned.

Fortunately, I don't use my TSB accounts to receive payments from anyone other than myself, so it isn't an issue for me, but I'd be seeking clarification if it was.

Biggles

Will this actually do what it says on the tin?

Yes, small amounts that go astray to an upright citizen will be returned easily and promptly.

But it seems to me that someone receiving a larger amount could, if they so choose, just empty their account (and maybe cancel their authorised overdraft if they have one) and not reply to correspondence?

eskbanker

Here's a thread about the corresponding changes to Halifax's Ts & Cs in 2014, in which many of the comments made still apply today, e.g. the (lack of) relevance of the car-buying scenario to terms about resolving misdirected payments. How could it be considered reasonable for anyone to claim not to have noticed a large payment asserted to have been misdirected 20 years ago?

masonic

eskbanker wrote: »

Here's a thread about the corresponding changes to Halifax's Ts & Cs in 2014, in which many of the comments made still apply today, e.g. the (lack of) relevance of the car-buying scenario to terms about resolving misdirected payments. How could it be considered reasonable for anyone to claim not to have noticed a large payment asserted to have been misdirected 20 years ago?

The difference in this case is that the TSB terms lack the "we will always act in a reasonably appropriate way and will try to minimise any inconvenience to you" clause, and add the "If we take the mistaken payment out of your account and it goes into a Planned or Unplanned Overdraft as a result, you will have to pay any charges and interest incurred" - even if it eventually turns out to be wrongly debited?

eskbanker

They do say "We will consider all of the information provided to us and will act reasonably whenever we are using this process" and there is no mention of the overdraft charges applying even if wrongly debited - I'd argue that if wrongly debited then it wouldn't have been a mistaken payment and it would certainly be unreasonable to charge customers for something they hadn't done!