Can a bank transfer be recalled by the sending account holder??

theartfullodger

I guess the real question is, in what circumstances can a sending account holder recall the funds....

I ask the question as I am a small-time landlord (sorry for anyone offended...). Usually for a new tenancy I ask for cash for 1st month & deposit (and provide signed receipts.). Thereafter rent paid by bank transfer.

Increasingly people are asking to do bank transfer (fair enough, I prefer them nice records....).

My concern is someone signs tenancy, transfers the money(day 1), gets keys (day 1), moves in (day 2), then on day 4 recalls the funds (say "raises a dispute" and comes up with a plausible story..) gets his money back, goes on to do nefarious things... I'm left with no money & no property...

So, in UK, ""in what circumstances can a sending account holder recall the funds.... "" please??

I just asked my bank (First Direct) and they said no, can't be done after the £££ appears in my account... but I kinda don't believe them...

glentoran99

No they cant, unless you agree

agrinnall

Artful, if you don't believe your bank maybe you would be better switching your account somewhere else, it's not a good basis for a financial relationship. Although I'm not sure who you would switch to, as they will all tell you that a payment cannot be recalled, because it can't!

verybigchris

A bank transfer can't be recalled.

What could happen is they use your bank details to pay in a cheque over the counter. This will show as a cheque deposit on your bank statement, but a lot of people wouldn't look too closely: they'd just see a credit of the correct amount and assume it's a transfer, only realising it's not when the cheque bounces.

mwarby

For a normal uk bank account, the transfer would be made by faster payments, these clear in under 2 hours, often in seconds. On all the online banking I've used there are clear warning that once made they can't be undone. The 4 day thing sounds more like cheques

I dare say should the police get involved in a fraud case the receiving bank would be obliged to reverse the transaction. I very much doubt either the send or receiving bank would get involved otherwise(many are reluctant to get involved in direct debit guarantee)

grumbler

Well, even without returning a payment banks can case you a lot of trouble with help of an unscrupulous sender:
Bank Blocked My Account
Barclays bank account under review?!
...
...

That said, it's very unlikely for a payment from a tenant.

mwarby

verybigchris wrote: »

A bank transfer can't be recalled.

What could happen is they use your bank details to pay in a cheque over the counter. This will show as a cheque deposit on your bank statement, but a lot of people wouldn't look too closely: they'd just see a credit of the correct amount and assume it's a transfer, only realising it's not when the cheque bounces.

One way round that these days would be for tenant to make transaction over phone or mobile banking just before keys are handed over

mwarby

grumbler wrote: »

Well, even without returning a payment banks can case you a lot of trouble with help of an unscrupulous sender:
Bank Blocked My Account
Barclays bank account under review?!
...
...

maybe not a bad idea to separate banks (not part of same banking group)used for personal banking and your landlord business, so if worst ever happened your not completely blocked out

[Deleted User]

I believe that there have been cases in the press where individuals have received money in their account that they weren't entitled to and that had subsequently been recalled. If they had already spent it knowing that they shouldn't have received it in the first place, they were prosecuted.

Isn't this the same or are we talking about something different?

PS I agree with mwarby absolutely - best to split personal and business banking

jamesd

First Direct was one of the first banks to support the feature, modifying their terms and conditions to permit them to take the money from accounts with them to carry out the reversing. The relevant part of the First Account terms and conditions is on pages 17 and 18.

"If a Bill payment or standing Order made through the faster payments service has been made into your account by mistake:

Who's made the mistake?

• The bank that has made the payment to your account: We may deduct* the payment from your account and return it. Up to 17 days after the payment has been made into your account.
• A customer of another bank has paid money into your account by mistake: 1, We may deduct* the payment from your account and return it if we reasonably believe it has been made into your account by mistake; or 2. We may prevent you from using the amount of the disputed payment if we reasonably believe it has been made into your account by mistake whilst we investigate further.

When we'll tall you: As soon as we can unless this would compromise our reasonable security measures or it's unlawful to do so.
* we won't deduct payments from accounts which don't allow withdrawals, e.g. Everday e-Saver; or if the deduction would take the account overdrawn and our overdraft service is not available.

In all other situations and for all other payment types, we'll contact you for your instructions.
If a payment is made into your account as a result of fraud we can deduct it from your account at any time."

They will also treat a deduction attempt as an informal request for an overdraft.

An account holder can recall the funds by claiming that they made a mistake with the account details. All banks are to support the recall of funds for this reason though not all do so yet. This includes payments made using the Faster Payments system and BACS.

However, the customer of the sending bank will need a plausible story to explain how they got the details wrong. You will also typically be given an opportunity to respond and contradict the claim and in the situation you have described that should be easy to do.

The relevant rules are in the Voluntary Code of Best Practice on Misdirected Payments but the Faster Payments page I linked to earlier has a better summary of the process.

The MoneySavingExpert news story Sent money to the wrong bank account? Now it should be easier to get it back from 28 Jan 2016 has a description and the full MSE guide is at What do to if you send money to the wrong bank account.

Do ensure that you are not using a personal account, though. First Direct will close personal accounts that are being used for business purposes. Assuming that you are using a business account, a business savings account would be one possible way to use the FD rules, given that they say they will not automatically withdraw money from accounts which don't allow normal payments to be made. It's also possible that their business accounts have different terms and conditions and you should check for that.

colsten

Your tenant would have to ask their bank to reclaim it, their bank would ask your bank, and your bank would ask you to comment.

If you have a piece of paper, signed by both of you, that specifies how much is to be paid when to which account, your tenant cannot reclaim the money.