Misdirected loan from Student Finance

PatrickColclough

Can anyone offer any advice or experience on a misdirected payment from Student Finance?
Briefly, my daughter transposed two digits on the account number she gave Student Finance and they sent her term's loan/grant of £3,200 to a third-party. They were told of the error on the 29th of September. They claim they sent a a Trace Notice requesting the bank return the funds on the 10th of October, have not received a reply from the bank and are no longer pursuing the matter.
Although the money is my daughter's, they would not give us the information to allow us to contact the bank directly, the bank will only deal with the Payer of the funds for obvious reasons.
They now tell us the money has not been recovered but can offer no verification of that, we cannot contact the bank to see if they have made any attempt at recovery, why the money cannot be recovered or even verify that, indeed, it has not been recovered.
Surely they must be accountable? They have not given us a single thing in writing; we have to rely on the information of their call-centre staff who have frequently given us misinformation. I have made a complaint to them but it is now three months and my daughter cannot pay her rent and we are unable to help her financially, hence the size of the loan/grant.

[Deleted User]

PatrickColclough wrote: »

Surely they must be accountable?

Surely your daughter must be accountable?

She needs to keep asking them to push the bank to make contact with the customer, but the fault doesn't lie with them, and they cannot force the recipient to hand back the money if it was transferred in accordance with your daughter's instructions.

Keep on at them.

Arleen

While it is your daughter's mistake, that doesn't mean it's entirely her liability (it may be) and there are ways to recover the money, as the person who received them is not entitled to keep it. You are on the other end of the common question: "if I received someone's money transfer by mistake, can I keep it?" to which answer is: no.

If student finance refuses to respond to you in writing, send another complaint in writing informing them that you will proceed to court if they don't come back to you within thirty days. And then, if they don't come back to you within 30 days, well, go to small claims and sue them for the 3,200. Because while you have a loan to repay, you never received the money.

You may want to consider getting legal advice before doing so, as this is pretty adversary route, so it may be worth to shell out the 50-120 quid for a local solicitor to look over it first.

You could also try your luck with ombudsman, although not sure how long will that take: http://www.financial-ombudsman.org.uk/publications/technical_notes/wrong-account-payments.htm

PatrickColclough

Student Finance stonewall any requests for further action. They have had nothing from the bank and will not pursue the matter further. They will not escalate my call, they will not put me in contact with the 'Trace Team'
The bank tells me they do not ignore Trace notices, they would have contacted Student Finance if they had received one. Who do I believe?
Student Finance, like any loan company, have no incentive to recover the money. I'm sure that if you were unfortunate to misdirect £3,000 you would be in constant contact with the bank, you would not wait two weeks before requesting the funds returned or do nothing for the next three months. Yet they persistently refuse us 'permission' to contact the bank directly to recover my daughter's funds ourselves. Surely, by putting themselves in this position they have a clear duty to proceed with the utmost diligence, instead they have done next to nothing, and slowly to boot.
But my main point is still; how can any financial organisation, let alone a government one, be in a position where they can say they have not received a payment of £3,000 and do not have to provide any evidence of this?

PatrickColclough

Unfortunately I do not have even £150 for a solicitor. I find it hard to believe that it doesn't contravene some FCA regulation. Surely they have to provide some evidence that they have not received it and my daughter still owes them £3,00. The bank tells me that if they are unable to recover the money they will provide the name and address of the third party so we can consider a private action against them. Student Finance will provide nothing, not even a letter to say what has happened.
Student Finance's website states that 240 students made this error last year alone, say between half a million to a million pounds a year. At best their policy is in nobody's interests, least of all the students; and at worst it is wide open to corruption. "Sorry, the records say we didn't get your money back and you'll just have to take our word on that, No you can't check that, and No, we will not confirm that in writing", is not acceptable in any financial transaction?

Dobbibill

Log a complaint in writing.

A quick google and I found this...

The complaints process

- You complain to the Student Loans Company
- Response received from the Customer Relations Unit
- If this hasn’t resolved the issue Complaint passed to senior manager
- And finally, if you’re still unhappy Complaint passed to the Independent
Assessor or Financial Ombudsman Service.

They say
'We’ll acknowledge your complaint within five working days and our
dedicated team will investigate your complaint and provide a response
within 15 working days.

I'm sure if this is the wrong Student Finance dept (Student Finance Wales etc) then other's will have a similar process.

While this was your daughters error, I totally understand your frustrations and they should at least be trying to help you. It sounds like you are being fobbed off.

I wish you all the best (and your daughter with her studies)

[Deleted User]

Would suggest that you and dd contact your MP for help, its amazing how the intervention of an MP concentrates the minds of these people, also has she sort help from the uni?

PatrickColclough

I contacted my MP about a month ago and received a terse, 'I will make representation to Student Finance' which was a start, but since then nothing has happened. 'Dobibill' is right though,it seems I have to wait out the Student Finance complaints procedure: three weeks before the initial response and no doubt months before it reaches anyone independent.

Dobbibill

PatrickColclough wrote: »

it seems I have to wait out the Student Finance complaints procedure: three weeks before the initial response and no doubt months before it reaches anyone independent.

It may not take this long, this is their longest timescale.

I did notice it can be done by email rather than snail mail. Which may start the day one clock ASAP.

PatrickColclough

I lodged a complaint last week by e-mail, no response so far. At one point in my telephone discussions with Student Finance they told me that if I lodged a complaint 'it would only delay things"! I think that is called bullying behaviour

Dobbibill

I genuinely hope they can help your daughter somehow or at least make an effort to help, even if they aren't able to give you both the outcome you hope for.

Whatever happens though, please post back the outcome.....many forget to do that and it can help other forum users in the future.