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

masonic

eskbanker wrote: »

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!

If "act reasonably" means that they will attempt to contact the customer and give them a reasonable timeframe to dispute the claim before the money is deducted, then that would be fine - but it is unclear whether or not that is the case. If it isn't the case, then the "information provided to us" is necessarily going to be one-sided and acting "reasonably" in that context is going to mean something quite different than acting reasonably when in possession of both sides of the story.

I'm not sure the "act reasonably" statement extends into the next paragraph that mentions the application of charges, as these would be separate from the reclaim process. There should be no reason to state that charges would be applied to an overdrawn balance in this specific circumstance, when other terms in the contract define this, so what is the purpose of this additional (apparently) redundant term?

eskbanker

I don't think that acting on one side of the story only could possibly be construed as reasonable, unless of course they've made meaningful but unsuccessful attempts to get the other side.

Likewise, if they took funds from an account, putting it into overdraft and then agreed that it wasn't a mistaken payment but only reversed the erroneous withdrawal and not the resultant charges, I can't see that as being reasonable (regardless of strict interpretation of Ts & Cs) and I imagine the FOS would view it the same way. I believe the apparently redundant term is there to clarify that they wouldn't be constrained by the current balance when reversing a misdirected payment and that the account holder would be liable, but could be wrong!

But yes, as with the Halifax equivalent in 2014, the wording is open to interpretation and it is certainly possible to see an onerous one - I don't recall seeing any indignant threads on here complaining about Halifax abusing their theoretical rights though....

masonic

eskbanker wrote: »

I don't think that acting on one side of the story only could possibly be construed as reasonable, unless of course they've made meaningful but unsuccessful attempts to get the other side.

Likewise, if they took funds from an account, putting it into overdraft and then agreed that it wasn't a mistaken payment but only reversed the erroneous withdrawal and not the resultant charges, I can't see that as being reasonable (regardless of strict interpretation of Ts & Cs) and I imagine the FOS would view it the same way.

I'm certain the FOS would see it that way, and I'm sure the OFT would have something to say if a unilateral term like this was used in a way that penalised a customer without genuine cause. My understanding of the new rules is that the bank should contact the recipient and give them 20 working days to respond before any money can be removed, but TSB's terms (as written) do not seem to reflect that. As I mentioned before, I would certainly be querying that and asking for something in writing stating the procedure they will follow in such a situation - if I used my TSB accounts to receive money, which I don't. I think it is right that anyone who is unsure questions the new terms.

I believe the apparently redundant term is there to clarify that they wouldn't be constrained by the current balance when reversing a misdirected payment and that the account holder would be liable, but could be wrong!

Maybe I'm misinterpreting what you have written here, but the "current balance" after the money was recalled would not afford any constraint on the charges. I don't think you are suggesting charges could be applied retrospectively from before the money was removed from the account - are you?

But yes, as with the Halifax equivalent in 2014, the wording is open to interpretation and it is certainly possible to see an onerous one - I don't recall seeing any indignant threads on here complaining about Halifax abusing their theoretical rights though....

It's hard to draw any conclusions from that, though, because it seems like most of the banks are only just coming up to speed on this and I'd imagine most MSEers are not in the habit of receiving bank transfers from other consumers (it seems vanishingly unlikely that a business would try to fraudulently reclaim a payment it made to a customer). However, you are probably right, but I'd be seeking to know for sure if I thought I'd be affected.

eskbanker

masonic wrote: »

Maybe I'm misinterpreting what you have written here, but the "current balance" after the money was recalled would not afford any constraint on the charges. I don't think you are suggesting charges could be applied retrospectively from before the money was removed from the account - are you?

No, I was referring to the balance before the recall - I believe the TSB wording is effectively saying to customers "if you've received an unexpected windfall from a misdirected payment, don't think that you can evade your liabilities by transferring the funds elsewhere, we'll take them back anyway, even if you don't have them in your TSB account anymore, if this puts you overdrawn that's your problem not ours"

EarthBoy

masonic wrote: »

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?"

I suggested the first four letters should be used. Yes, there may be cases where even these might be typed incorrectly, but I think it would allow the vast majority of names to be entered without any problem. If people can't get four letters right there's no hope for them.

Eco_Miser

EarthBoy wrote: »

I suggested the first four letters should be used. Yes, there may be cases where even these might be typed incorrectly, but I think it would allow the vast majority of names to be entered without any problem. If people can't get four letters right there's no hope for them.

If someone happens to be named Feilds exactly the same problem as masonic described would happen in just four characters.

Anyway, fuzzy matching of (american) names was solved fairly well with a system called Soundex in 1918, there's been improvements since. It ignores vowels, except first letter, and groups similar consonants together, giving a 1-letter, 3-numbers code for all names. It's already built into popular database software, so wouldn't mean massive coding effort to check the supplied surname has the same Soundex code as the supplied account. It's still an extra field and more checking though, so probably won't happen.

masonic

EarthBoy wrote: »

I suggested the first four letters should be used. Yes, there may be cases where even these might be typed incorrectly, but I think it would allow the vast majority of names to be entered without any problem. If people can't get four letters right there's no hope for them.

Doesn't the current system already work in the vast majority of situations? Your proposal just seems to transfer the problem from one group of people to another with the added annoyance that even some payments with the correct sort code and account number will fail.

Edit: To illustrate, here is just one example that could solve the problem completely (all completely theoretical and would never be implemented)... Account holders generate and send a payment request/invoice by email/SMS that contains a link with a new URI Scheme that, when clicked, would pre-populate the transfer details in an online banking app of the person who needs to send the payment. Of course, this too has its limitations - I can imagine the new wave of spoof/phishing emails and texts that would start if something like this were launched. Better yet would be an inter-account payment request system that was completely contained within the banking infrastructure - now I'm really dreaming!

ChiefGrasscutter

rtho782 wrote: »

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.

Well the ACTUAL text of TSB's circular letter to me is:

..."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 money from your account. We don't have to ask you before we do this but we'll let you know if this happens and ask you to tell us if you don't think this 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 act reasonably whenever we are using this process."

So it is pretty clear and reasonable to me. They have the legal T&C's right to remove the money without further OK's from you, but they will only use this right if you refuse or decline to respond to their question about the disputed credit in your account.

Edit:
The next para from TSB describes the situation on any resulting overdraft exactly how @esbanker says above. In other words if you move elsewhere or spend the wrongful credited money and now as result of the recall you are now in overdraft - then that is your problem.
Here is the extract:

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

masonic

ChiefGrasscutter wrote: »

..."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 money from your account. We don't have to ask you before we do this but we'll let you know if this happens and ask you to tell us if you don't think this 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 act reasonably whenever we are using this process."

So it is pretty clear and reasonable to me. They have the legal T&C's right to remove the money without further OK's from you, but they will only use this right if you refuse or decline to respond to their question about the disputed credit in your account.

What is unclear is the "this" that I've highlighted. You are assuming "this" refers to TSB finding out about the potential mistake, but "this" could equally refer to TSB taking the money from the account.

rtho782

It's still completely unbalanced.

There is no time limit on reclaiming funds you have sent "in error". The bank won't get involved in who owes who money. In the example I described above, I sold my car, they paid me, then later reclaim it, is it even proof it wasn't "in error" if I can prove I sold him my car?

Let's say I spend weeks dealing with the DVLA getting proof of keeper transfer (which isn't proof of ownership anyway) and get him to sign a reciept.

He then says "Yeah but I was planning on not paying him for the car, I send the money by accident". Or, he says "We agreed a repayment plan, I was only supposed to give him £50.00 right now, but I forgot the decimal point"

In both cases, technically according to his story the payment was in error and so should be returned to him.

And as I say it's completely unbalanced. He can claim money back 20 years later. If I take the money he gave me for the car, and go on holiday for a month with it, then I've missed my 20 day window to dispute his reclaim, and so my money is gone, and I'm paying massive overdraft fees.

How is that fair?!

And all this to protect idiots that can't enter the right details when they send money. Let's make everyone else less safe.