Beware of Co-op Bank's illegal internal policies following notification of death of a customer

V8SAH

I'm having one hell of a job trying to get Co-op bank to refund Direct debit monies paid out of an account after having received notification of the death of the account holder.
My father died in April. He had very little savings but had debts of c.5 x his cash balance after paying funeral expenses. He did not leave a Will. 
I advised Co-op Bank of his death by telephone within 48 hours and asked them to stop the bank account. However, Co-op internal policy is to allow the bank account to continue until they receive the death certificate (which took much longer due to Covid lockdown). Consequently, they paid out almost £600 from the account to persons who had no legal right to receive the money and who refuse to give it back. Consequently, the "estate" is £600 poorer than it should be for settling his outstanding debts.
I believe that English law is clear on this point and that, upon receipt of notification of the death of a customer, the banks authority to pay direct debits etc is cancelled with immediate effect. I believe that Co-op internal policy is wrong but my complaint to Co-op and FOS has been declined on the basis that Co-op bank correctly followed their internal procedures .... even though they are illegal!. Has anyone else had a similar problem with any other UK bank?   

Mojisola

V8SAH said:

I advised Co-op Bank of his death by telephone within 48 hours and asked them to stop the bank account. However, Co-op internal policy is to allow the bank account to continue until they receive the death certificate 

Or the notifier fills out a Bereavement Instruction Form.

www.co-operativebank.co.uk/assets/pdf/bank/lifemoments/Bereavement-Instruction-Form.pdf

getmore4less

Is the estate solvent?

naedanger

Are you certain the co-op's processes are illegal? (I would have thought a death certificate should be required to freeze an account on death.)

Keep_pedalling

As your father’s estate is insolvent, you should not be attempting to administer it. Walk away, it is the creditors problem don’t make it yours.

Linton

Notifying a bank of a death by telephone doesnt strike me as a very sensible way of going about things.  What would you say if your bank shut down your account if I were to notify them of your demise?  Banks should only take the drastic action of freezing an account when they have proof.  The appropriate proof is the death certificate.

So it seems to me that the Coop bank acted correctly.

Mickey666

Linton said:

Notifying a bank of a death by telephone doesnt strike me as a very sensible way of going about things.  What would you say if your bank shut down your account if I were to notify them of your demise?  Banks should only take the drastic action of freezing an account when they have proof.  The appropriate proof is the death certificate.

So it seems to me that the Coop bank acted correctly.

Yes, that was my first thought.  I understand the OPs annoyance but there are wider issues at stake.  Imagine the scope for malicious nuisance if anyone could phone a bank and get someone's account frozen simply by saying they had died and not being required to provide any proof.

jonesMUFCforever

I agree with the majority here - the bank should only block the account after it has seen the death certificate. This is not illegal - it makes perfect sense to do business this way. Just imagine the mess it would create if anybody could telephone any bank to advise of a 'death' say out of spite, when no death has occurred?

JGB1955

Barclays froze my father's bank account upon me phoning them the first working day after his death.  This was in June when deaths were taking far more than a week to be registered.  I don't know if they acted immediately because I had a registered POA with them (although I acknowledge that the POA was, by that time, null and void) but it certainly happened before I had uploaded the death certificate to their bereavement team.  I guess each financial institution has different 'rules'.  I was also able to freeze all of my father's share holdings with just a phone call.  Equiniti didn't even want to see a death certificate and just told me to wait until probate was granted.

poppystar

I was amazed at how easy it was to freeze accounts after my father died. A single telephone call and his cards and his sole accounts were frozen immediately. It was some two weeks later before I had the death certificate and was able to confirm things. I must admit it made me think of what mischief someone could do if they wanted. It did, however, put my mind at rest as at that point I was not in possession of his cards. In fact I only knew of one account and on the back of informing them of that they froze the others - but wouldn’t tell me what they were, just that other accounts existed, I had to go through paperwork later to establish that.

V8SAH

Thanks everyone for your opinions. I totally understand the views of people who question my belief that this is illegal but I spent over 30 years working in UK banks and, as far as I am aware, the Co-op is the only bank to operate in this way.... which is why I was asking if anyone else had experienced something similar with any bother UK Bank.  The banker-customer relationship in England is governed by the Law of Contracts, Statutory Legislation and Case Law. It is a contractual relationship between two parties which may be terminated by either party on a voluntary basis or involuntarily by the process of law. One of those involuntary processes of law is the death of the customer and receipt of notice of death (not the actual date of death) revokes the paying bankers authority to make any further payments from the bank account. This is well established in English law and applies equally to all payment instructions including standing orders and direct debits since it is the bankers authority that is revoked upon receipt of notice of the death of the customer. Provision of the Death Certificate and Grant of probate etc (if required) are necessary to ultimately complete the closure of the bank account and to pay away the balance to the personal representatives but NOT to stop the account - that is a legal requirement on the bank and is designed to protect both the bank and the customer. If contracts for personal services (which a bank account technically is) were allowed to continue beyond receipt of notification of death of one of the contracting parties, this would overturn centuries of English Contract law. There are very few instances when a bank should allow debits from an account following the death of a customer (funeral expenses being one) but they should certainly not honour any cheques (S75(2) Bills of Exchange Act 1882), standing orders or direct debits after having received notification of death. That's my belief anyway ..... I've just got to get the Co-op & FOS to agree. If the bank were to receive a "mischievous" notification of death of a customer, the onus is still on the bank to the bank to immediately stop the account whilst it verifies the notification..... Its normally very easy for a customer to prove that they are not actually dead!