Bank Mis-processes Solicitor's Payment for Sale

Ballard

Retiredwelshman said:

born_again said:

flo22 said:

born_again said:

xylophone said:

I notice that this comment was made on your other thread

M&S isn't a clearing bank in it's own right. All it's back office functionality is performed by HSBC. 

HSBC must hold thousands of foreign accounts.......

Which is true.
But factor in that payments are not a manual process. It's all automated. In exactly the same as any faster payment. 

So the issue of how it got to a foreign account is a odd one. Given to direct it to a foreign acc requires a swift/iban and not just a sort/account no.

There must have been some interbank contact on this. 

CHAPS payments are not automated like FPS payments

In what way.
Other than someone having to type the details in (same as a faster payment) Chaps requires nothing at the receiving bank to be actioned.

They do - they are checked to make sure that the beneficiary name and account number match - otherwise the payment is rejected and returned.

I rather doubt that every CHAPS payment is manually checked. According to the BOE there were an average of 175k CHAPS payments per day last year. That would be a lot of checking. System should be flagging unusual receipts but I suspect that the vast majority will be STP. 

Time4T_Accounts

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). It makes a mockery of the ‘same business day’ credit that is supposed to underpin CHAPS - but payments are sometimes held up for a small number of days.  I’m certainly not saying that this is what has happened in this case, just that it does happen, and, when it does, getting any information out of the banks is mightily difficult.

nyermen

Since a sort code and account number aren't an IBAN (domestic CHAPS is a sterling only service...), and Lloyds and HSBC are clearing banks (ie. - no intermediaries - not sure if something else happens with M&S, but still), I can only assume one of these has happened:
1) Internal bank mistake or fraud leading to money going abroad (in which case there should be no investigation, the bank should be paying the customer immediately.  Since M&S are giving the details, the mistake would be by the receiving bank.
2) Destination bank account details were wrongly given/entered (but sort code or at least bank was correct since they have info) and the actual recipient quickly transferred the money abroad.
3) Recipients account / internet banking was hacked.
4) There is a fraud check, and this is their "not alerting the customer" approach.

xylophone

2) Destination bank account details were wrongly given/entered (but sort code or at least bank was correct since they have info) and the actual recipient quickly transferred the money abroad.

But the initiating bank has provided  documentary evidence to their customer (the solicitor) who has copied it to the OP that the sort code and a/c number were correct.

The solicitor passed back to me their bank's report on the CHAPs payment - it is correct. Their bank have checked the payment and it says that it has cleared into the instructed account.

3) Recipients account / internet banking was hacked.

There appears to be no evidence of this - surely if there were, M&S would have suspended any access to the account by the OP while they investigated/provided new log in details/ATM cards etc?

The OP appears to be enjoying access as heretofore?

xylophone

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Time4T_Accounts

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Very much so.  The law firm inevitably gets it in the neck from the client (or from the other side’s solicitors), but there is absolutely nothing that can be done other than for the solicitor to keep pressure on the bank to resolve it.

Ballard

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

The type of transaction makes no difference. Every payment will need to be checked for evidence of money laundering but the majority of this will be done by computer. 

badger09

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Steve_PL_too said:

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Very much so.  The law firm inevitably gets it in the neck from the client (or from the other side’s solicitors), but there is absolutely nothing that can be done other than for the solicitor to keep pressure on the bank to resolve it.

That's a little worrying. Any idea how long they're likely to be held up (in a worst case scenario)?
Hoping to complete on house purchase on 4th Feb and the money is sitting in our current account following completion of sale 8th Jan. 
Does it make any difference if the solicitor is already an existing payee and previous (low value) payments have been made?.
I obviously wasn't going to leave it until the day before, but might send it next week as its currently earning precisely 0. 

mrschaucer

Steve_PL_too said:

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Very much so.  The law firm inevitably gets it in the neck from the client (or from the other side’s solicitors), but there is absolutely nothing that can be done other than for the solicitor to keep pressure on the bank to resolve it.

Quite.  The SOLICITOR has paid OP the money but the OP has not received it.  It surely shouldn't be up to OP to chase banks to try to determine where his money is - it should be the solicitor moving heaven and earth with the bank to find the money before they get a not unreasonable demand from OP to pay up again from their own coffers.

naedanger

Steve_PL_too said:

xylophone said:

In my career I’ve seen plenty of CHAPS payments held up because of money laundering checks in the banks (paying and/or receiving). The solicitors can’t get any details (the banks have to be sure they don’t fall foul of the rules around ‘tipping off’). 

Even with exchange/completion property transactions?

Very much so.  The law firm inevitably gets it in the neck from the client (or from the other side’s solicitors), but there is absolutely nothing that can be done other than for the solicitor to keep pressure on the bank to resolve it.

Do you know if the solicitor would be breaking the law if they told their client they suspected the delay was due to money laundering checks? And would it make a difference if the solicitor merely suspected that was the reason, as opposed to knowing it was the reason?