Credit Payment Recovery

Neil212121

Hi All

This is my first post, please be gentle with me.

My son made an electronic payment in error from his mobile phone to an unknown recipient for the sum of over £4,000.00. He immediately called his bank (within 10mins) and reported the mistake.
The bank logged and verified that the payment had been debited from his account and put into place the investigation and made contact with the recipients bank. This happened on 6 August 2018.
He received a letter in the post today 30 September, dated 20 September and I quote;

“Unfortunately the recipient has insufficient funds to repay you. Therefore, their bank has not returned the payment to you”

Unsurprisingly, we are absolutely devastated by this and feel that his bank have completely washed their hands of it. From a little research, I know that it is illegal for the recipient to spend this money, but under current law the recipient does not have to hand the money back.

If anybody out here has had a similar situation I would be extremely greatful for you to share your experience with me.

Thanks

[Deleted User]

Contact the bank again.

How did he accidentally send it to the wrong person?

Are you sure it’s not some sort of money laundering scam he’s taking part in?

Shakin_Steve

Under the new (well, newish) terms and conditions of my Barclays current account, they can take the payment back without my permission. No good if I've already spent it, of course.

eskbanker

The banks concerned will probably have done all that they reasonably can do at this stage, i.e. refer the matter to the recipient and report back to the sender. Even if the recipient had the money, their bank is unlikely to simply take the sender's word for it being a mistake and so, despite there being a theoretical route for them to remove funds without recipient's consent, I believe that would only be done in exceptional circumstances, rather than just on OP's son's say-so, but this is moot anyway if the money has now gone.

To the best of my knowledge the next step needs to be for OP's son to embark on some sort of legal process to discover the identity of the recipient (the banks can't disclose this under data protection legislation, unless or until forced to do so via legal means). I'm afraid I can't recall the name of the procedure concerned but believe it to be quite expensive.

Once the identity of the recipient has been confirmed, OP's son then needs to sue him/her for return of the money, unless the police are interested.

18cc

I would point out that spending money accidentally sent to your bank account is a criminal offence under the theft act and therefore one way would be for you to report it to the police

the person receiving the money presumably knew it was not destined for them and spent it anyway and they can therefore be charged with a criminal offence

in any case the police should be able to get the identity of the person receiving the money and you can then consider suing them for the return of the money

Neil212121

Hi All

Thanks for your replies. My son had a previous one-off recipient from 2 years ago stored as a payee in his phone that coincidentally had the same Christian name as the intended recipient and used this by mistake, it was not a scam.
In the letter from the bank, they are saying that there is a reasonably simple process for us to force the bank to identify the name and address of the recipient and that we could go after the guy in the small claims court, but I don’t know if this process has ever been successful.
Other guidance in the letter is to contact Citizens Advice or lawworks.co.uk.
Surely the recipients bank could claim this back, if the guy has not got the money in his account then he has spent it and that’s illegal.

Any further replies would be greatly appreciated.

Neil212121

I have just found this below guidance as well.

On 26 January, 2016, the code was strengthened by a new procedure so that where the recipient doesn't dispute the return of funds, the money will be returned within 20 working days.

My sons bank has not said that the recipient has disputed the money so surely we have a sound case for retrieval of the payment.

Thanks

Uxb

The legal proceedure for acquiring the details of the unknown third parties is called a Norwich Pharmacal order.
The name arose from the first case in 1973 in which a such a discovery order was made.

Edit:
The theft amendment Act 1996 inserted new clauses (section 24A) into the 1968 Theft Act to make keeping of a wrongful credit to be an criminal offense. The clause was further modified by the 2006 Fraud act.

Neil212121

Thanks Uxb, much appreciated, sounds like we have a pretty good legal case.

maxximus75

If your Son had previously sent a payment a couple of years ago to this recipient, does he not know they details of who it is?

eskbanker

Neil212121 wrote: »

Surely the recipients bank could claim this back, if the guy has not got the money in his account then he has spent it and that’s illegal.

While it may indeed be illegal if proven, the recipient could easily claim that he was owed the money (or a similar tale), so his bank can't be expected to take sides in a dispute like that and would only take further action if directed by a court.

Neil212121 wrote: »

I have just found this below guidance as well.

On 26 January, 2016, the code was strengthened by a new procedure so that where the recipient doesn't dispute the return of funds, the money will be returned within 20 working days.

My sons bank has not said that the recipient has disputed the money so surely we have a sound case for retrieval of the payment.

Your son may indeed have a decent case but has to go through due process to make that case. The 2016 code simply states a process that the two banks have to go through but if the money is no longer in the account then the recipient's bank can't do any more.

Unfortunately there's a world of difference between being in the right and (a) being able to prove this and (b) actually recovering the money....