Paying money to wrong account

OceanSound

If you setup online payment, does anyone know what determines if the payment goes through as a 'faster' payment or not. E.g. sort code of receiver?.

I remember reading up on how faster payments work, and it said there is a mutual 'handshake' between the two banks/accounts, so i would have thought payment would fail at this point if account number is incorrect(does not exist). However, if sort code is incorrect maybe the system just thinks the receiver bank is a non-participant of the faster payment system, so it sends the payment via the normal 'to be credited before next business day route'. Which leads to the likelihood of the money being held in a suspense account.

Anyway, the op used phone for payment so none of this applies. Just saying ...

agrinnall

OceanSound wrote: »

If you setup online payment, does anyone know what determines if the payment goes through as a 'faster' payment or not. E.g. sort code of receiver?.

I remember reading up on how faster payments work, and it said there is a mutual 'handshake' between the two banks/accounts, so i would have thought payment would fail at this point if account number is incorrect(does not exist). However, if sort code is incorrect maybe the system just thinks the receiver bank is a non-participant of the faster payment system, so it sends the payment via the normal 'to be credited before next business day route'. Which leads to the likelihood of the money being held in a suspense account.

Anyway, the op used phone for payment so none of this applies. Just saying ...

Sortcode does determine how a payment is sent, if you use a sortcode checker it will tell you whether that sortcode is enabled for FPS.



However, your understanding of the system is flawed: there is no alternative "normal 'to be credited before next business day route'", at least for retail customer. Either a payment is sent by FPS, which can take anything from almost instant to end of next working day and still be within the Payment Services Regulations, or it can't be sent electronically at all. The only alternative to FPS is CHAPS, and you have to pay for that. If a payment cannot be sent by FPS then a cheque, cash or a deposit in branch are probably the only other options. Businesses may also have the option to use BACS Direct Credits, which take 3 days but can look as if they've been processed in 1 day.

OceanSound

agrinnall wrote: »

Sortcode does determine how a payment is sent, if you use a sortcode checker it will tell you whether that sortcode is enabled for FPS.

However, your understanding of the system is flawed: there is no alternative "normal 'to be credited before next business day route'", at least for retail customer. Either a payment is sent by FPS, which can take anything from almost instant to end of next working day and still be within the Payment Services Regulations, or it can't be sent electronically at all. ....

Have a look at:
http://www.fasterpayments.org.uk/how-faster-payments-works

Where Mike's account is with a Faster Payment Participant Bank, he should generally be able to see the credit on his account within seconds and also be able to access the funds. If Mike!!!8217;s account is with a non-participant of the Scheme, then it may take longer for funds to be shown on his account.

Have a look at the checks mentioned in the fasterpayments.org.uk website. Particularly No.7 and 8.

7. Once Mike!!!8217;s bank has received the instruction, it checks that the account number is valid (note, it does not verify that the account name and number match), and then sends a message back to the Faster Payments Service that it has accepted (or rejected) the payment.

8. The Faster Payments Service credits the receiving bank with the funds and sends a message to the sending bank to let them know that the transaction has been made successfully.

If each payment goes through these checks there is no reason for the money to end up in a suspense account. Why would the FPS send a message back saying '"the transaction has been made successfully" if it went in to a suspense account. Seems bazaar.

ColdIron

OceanSound wrote: »

Seems bazaar.

Well, that's market forces for you

OceanSound

ColdIron wrote: »

Well, that's market forces for you

or is it Meerkat forces?

Terry_Towelling

Don't forget, the OP here made an error (possibly) with the last two digits of the sort code, so it is essentially an intra-bank transfer not an inter-bank payment. Tracing the cash would therefore be far easier and, presumably, if the sort code and/or the account didn't exist it would most likely have bounced immediately. I'm guessing that the FPS processes don't come into play here because it's all within the same bank.

I like the 'Market Forces' quip but wonder whether the recipient realised why it was made.

OceanSound

I feel some of us are talking about making a 1 pound payment to check the account sort code (not just it's validity - but correct account/sort), and others are still stuck on the OP's problem. The OP who is long gone.

About the 'quip'. Some of us are too busy working out the jargon, nevermind 'quips' which are somewhat exclusive for the haughty.

agrinnall

OceanSound wrote: »

Have a look at:
http://www.fasterpayments.org.uk/how-faster-payments-works

I know how FPS works (my team worked on the software development for one of the biggest banks), which is why I explained it to you. Nothing that you have posted has contradicted what I said, so I'm not sure what your point is.

Armorica

agrinnall wrote: »

I know how FPS works (my team worked on the software development for one of the biggest banks), which is why I explained it to you. Nothing that you have posted has contradicted what I said, so I'm not sure what your point is.

Everything this poster on this thread has said is correct.

"I remember reading up on how faster payments work, and it said there is a mutual 'handshake' between the two banks/accounts, so i would have thought payment would fail at this point if account number is incorrect(does not exist). However, if sort code is incorrect maybe the system just thinks the receiver bank is a non-participant of the faster payment system, so it sends the payment via the normal 'to be credited before next business day route'. Which leads to the likelihood of the money being held in a suspense account."

This however is very jumbled up.

The majority of faster payments are subject to online authentication (what you're calling a handshake) - this flags up if the account doesn't exist or is closed or can't accept credits IF the recipient bank is a direct participant in Faster Payments. i.e. listed here http://www.fasterpayments.org.uk/directly-connected-participants

Other receiving accounts are 'offline' so no mutual handshake down to receiving account payment. These payments are checked offline and can be returned if the account is closed, for example.

I've made £1 test payments before without a problem (from TSB to HSBC and Barclays). But it varies by bank. And fraud settings are varied on a regular basis.

soulsaver

OceanSound wrote: »

About the 'quip'. Some of us are too busy working out the jargon, nevermind 'quips' which are somewhat exclusive for the haughty.

Good pint.. well made