Bank Mis-processes Solicitor's Payment for Sale

cpx2

Hi,

It has been suggested that I reposting this here - from the House Buying, Renting & Selling section: https://forums.moneysavingexpert.com/discussion/6232423/bank-mis-processes-solicitors-payment-for-sale/p1

I sold my house at the end of last year. I gave my solicitor my M&S Bank details.

A couple of weeks ago, the money had not arrived. I took this up with my solicitor and they confirmed that they had made the payment and they confirmed with their bank (Lloyds) the payment had cleared and the details were correct.

It took a while to get hold of someone at M&S - they put me on hold a few times and other times dropped the line. Eventually I found someone who would deal with this and they advised me that it had been paid into an overseas account and they were trying to recover the money. I found this all a bit worrying as this is my life savings.

I have a couple of questions.

I found it a little odd that they should make a point that the payment had been made (mistakenly) into an overseas account. Someone has suggested that they are saying this so that they can claim they did not have to follow Confirmation of Payee rules. I wonder whether I can ask for documentary evidence of the mis-payment to check whether they are being honest?

Also, given that they have had clear and correct instructions to pay, and so it is M&S who have made a mistake, I cannot see why it matters who they paid the money to. Surely, in law they owe me the money and so should pay me straight away. Or are there special rules for banks?

Finally, I wonder whether it should be me chasing the bank or my solicitor chasing them - as the contract for payment was between Lloyds and M&S and only indirectly involves me.

Be good to get a better understanding of my legal situation. Seems really odd that the bank can make such an obvious mistake and not be responsible for fixing it - especially as it is such a large sum of money.

NottinghamKnight

Raise this as a formal complaint with your bank, that starts the clock ticking as they have to resolve in a maximum of 8 weeks or you can go to the ombudsman. Make sure you have written evidence from your solicitor and their bank of where the money was sent as that confirms that your bank should have received it. You can continue to chase but may not have much more success in the short term, do you have an immediate need for this money such as a new house purchase as if so you need to be clear with your bank when the money needs to be made available and the consequences of it not being so, eg loss of deposit, penalties etc

cpx2

@NottinghamKnight - thanks for the reply. We have raised a formal complaint, but, as you suggest this is not going anywhere fast. What I do not understand is why they think they can just sit on the money when all the facts show it should be paid. Surely that is not legal.

BrownTrout

how did such a mistake come about?

Notepad_Phil

This sounds very strange. If I've got this right then you passed your bank account detail to your solicitor, your solicitor then gave that information to to their bank and the payment was made - now this is where I am confused, how did the payment get to the foreign bank and how did your M&S bank know that it got there.

If you gave the wrong account information then M&S would have no idea where it was and it would have been Lloyds telling you that the money was in a foreign account. So it sounds to me as though the payment must have arrived in your account but that there was a subsequent transfer to this foreign account - so are you 100% sure that the money never arrived in your account.

If the money did arrive then the question is who made the transfer? You wouldn't be here if you had, so it must have been someone else. If the incoming money had raised some kind of issue then I can see that the bank may have put some restrictions on your account access, but I wouldn't have thought that they would physically transfer it elsewhere.

cpx2

@BrownTrout and @Notepad_Phil thanks for the posts. 
@Notepad_Phil, yes it is very strange. And even stranger that M&S won't explain. Vis a vis "so are you 100% sure that the money never arrived in your account." Well it does not appear on the statement and M&S have said a couple of times now that it was paid straight into a foreign account. I wonder whether this is a blanket excuse to avoid criticism that they did not follow the UK Confirmation of Payee rules - i.e. check the payee names matched.

colsten

"UK Confirmation of Payee rules" sounds like a red herring. COP is not compulsory, and mismatches can be overwritten, anyway. Domestic payments are made solely to a sort code and account number. Payments to foreign accounts cannot be made with sort code and account number - they would need something like an IBAN, a BIC and/or SWIFT code etc.

M&S doesn't provide foreign accounts, so it is unclear how they would know that your money 'was paid straight into a foreign account'.

If the money is still missing, your solicitor should ask their bank to put a trace on the money, and provide the result to you straight away. You might need to engage a different solicitor to make that happen.

eskbanker

Yes, I can't see the relevance of CoP here either - according to the launch article at https://www.moneysavingexpert.com/news/2020/06/confirmation-of-payee/, M&S Bank weren't offering CoP for transfers from their accounts (at that stage anyway) but they are making their accounts checkable by others, so a payment from Lloyds to M&S would be CoP checked by the sender.

Fighter1986

The only time CoP would have been of any relevance was when the Solicitor was initiating the funds transfer to your bank.

If the sort code and acocunt number didn't match the name provided, Lloyds (your solicitors bank) could have alerted them to this at the time your solicitor initiated the payment into your account.

As stated above, your solicitors need to initiate a trace on the funds with their bank, and also they need to provide written confirmation of the sort code and acocunt number to which the payment was sent, which you can then forward on to M&S to aid their investigation of your complaint.

The fact that M&S has told you that they could see the funds having gone elsewhere raises big alarm bells, possible internal mischief? Something similiar happened to a colleague of mine with HSBC (M&S parent bank) over ten years ago and they ended up discovering that HSBC staff had been committing internal fraud. There was a large settlement. This might not be happening here, but it isn't impossible.

EDIT: Oh, it seems to be a regular occurrence.

https://www.cityam.com/ex-hsbc-employee-jail-over-67000-customer-accounts-scam/
https://www.theguardian.com/uk/2008/jul/13/ukcrime
https://www.birminghammail.co.uk/news/crooked-hsbc-workers-lived-luxury-14386859

Of course this is just speculation. Anything could have happened. 
Get the facts from your solicitors, their bank, and your bank via their complaints procedure first.

Ed-1

Was it a CHAPS payment? Usually payments from Solicitors are. These require someone to manually credit the funds received into an account.

born_again

Ed-1 said:

Was it a CHAPS payment? Usually payments from Solicitors are. These require someone to manually credit the funds received into an account.

As such I would expect that a member of staff at the solicitors entered the details for the payment. Not their bank to make the payment.

I would be asking the solicitor for proof that it has been made to the correct account.