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

V8SAH

Keep_pedalling said:

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.

With the benefit of hindsight, I totally agree with you. There is not enough left for anyone to bother administering the estate so, as I now realise, the creditors will just write off their debts and the small balance would be left dormant in the bank for years before ultimately being transfer to the state. Unfortunately, when I encounter a situation where, in my opinion, a bank is acting improperly, I want to try to get them to change their practices so that others aren't caught out in a similar way.  

Malthusian

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.

Is it well established in English law that some random dude ringing the bank up and saying you've died constitutes notice of the death of the customer? Genuine question. From where I, and most other posters are standing, it appears to be up to the bank's discretion whether they accept a phone call as notice or require the death certificate.

The banks that accept notice via phone (as in poppystar's case) are running the risk that it's a malicious hoax and they have to recompense the angry accountholder. Which would be very rare, but not unheard of.

Lots of banks chancing it on notification via phone does not mean that every bank is legally required to trust a phone call.

V8SAH

JGB1955 said:

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.

Barclays appear to have done exactly the right thing. I too reported my fathers death to Co-op on the first business day following his death and, like you, this was during the national Covid lockdown. Co-op refused to stop the account (their policy is not to) and also refused to accept anything but a paper original of the Death certificate (no uploading for me!). They "never received" the first copy so I had to send them a second one, and 35 days after his death, they finally stopped the account. In the meantime they  paid all standing orders and direct debits from the account despite my frequent requests for them to stop the account.    

Mickey666

Yes, it would probably be very easy for someone to prove they were not dead, but how many people would immediately know their account had been frozen by a malicious telephone call?  What if they didn’t find out until some important payments had not been made, possibly causing credit defaults and a damaged credit rating?

I don’t have your 30 years experience within the banking industry but I would like to think the FOS knows a bit about finance law, so if they have already declined your complaint . . . 

p00hsticks

V8SAH said:

 Its normally very easy for a customer to prove that they are not actually dead!

I'm not sure that that's always necessarily true - As someone with no acceptable photographic ID (passport or driving licence) I have enough trouble proving that I am who I say I am even though I'm alive !  Even if I did possess such items, it presumably would necessitate a physical trip to my local bank branch to prove that I matched the photos, which given recent bank closures would mean a round trip of 30-odd miles. 

On your original topic, I don't think sight of a death certificate is a particularly onerous request to make.  I had to report my brothers death to the Halifax. They have a system where you can scan and upload the death certificate (which I obtained via the post following a telephone call with the registrar within a week of his death), and the direct debits appear to have stopped within a day or two. 

Savvy_Sue

V8SAH said:Its normally very easy for a customer to prove that they are not actually dead! 

As long as they know someone has said they are ... 

You have my sympathies. I must admit I was surprised when my late mother's phone provider just took my word for it that she had died, closed the account and refunded all charges since the date of death (there was an internet connection to the house plus we were making occasional calls there for a couple of months.)

V8SAH

Malthusian said:

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.

Is it well established in English law that some random dude ringing the bank up and saying you've died constitutes notice of the death of the customer? Genuine question. From where I, and most other posters are standing, it appears to be up to the bank's discretion whether they accept a phone call as notice or require the death certificate.

The banks that accept notice via phone (as in poppystar's case) are running the risk that it's a malicious hoax and they have to recompense the angry accountholder. Which would be very rare, but not unheard of.

Lots of banks chancing it on notification via phone does not mean that every bank is legally required to trust a phone call.

I'm afraid the answer to your question is Yes. Notification of death can come from a variety of random sources and the bank does not have the luxury of choosing to ignore such notification without proper investigation. It should investigate the accuracy of the notification but, in the meantime, it must stop the account to protect both itself and the account holder.  

naedanger

V8SAH said:

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! 

You might have more chance of getting the co-op and FOS to agree if you were to quote the legal cases that establish the case law that you say exists. As it is you are still only making an assertion.

Dr_Crypto

There was a post on MSE at one point from a customer who’s bank thought he was dead when he was very much alive. 

sheramber

When my husband  died we notified all the companies he had direct debits with and they cancelled them.
His credit card was cancelled on the strength of a phone call  but a copy of the death certificate was requested. A bill was sent for the outstanding balance.

Tesco bank froze the account per the phone call but requested a copy of the death certificate to close the account.

TSB  required a visit to the branch with the death certificate.