Transferwise - withholding customer's money

mark10525

I'm looking for some advice on the course of action I should take:
I have (soon to be: had) an account with Transferwise (TW). I used this to pay business and personal bills. The sequence of events is as follows:

February 21

• I instructed a payment to a supplier for an invoice (due that day). I have paid this way before. The transfer was shown as completed and the money having arrived with the recipient. I believed the invoice had been paid.

February 24

• 3 days after confirmation of the above, I receive an email from TW telling me that the payment above was not sent. I need to provide additional identification. If I do not do so within one business day my account will be closed.The invoice was now late for payment. I immediately instructed payment from a different bank account and told TW not to proceed with the transfer but instead to return the money and fee for the failed transfer to my ledger balance.
• The funds not having been credited and with no change on the account, I queried this via online chat and was told that they are "waiting for the money to come back". I asked: "Where from? The funds never left". Apparently, they're waiting for their bank to "return the funds". Re-crediting my account appears to rely on their internal procedure with their bank completing. This should be complete within "approximately 2 to 5 business days".

Today, March 3

• The funds remain showing on my TW account as sent. They are not available to me to withdraw.
• The 5 business days has now expired. These funds pertain to a transfer that TW had been instructed to make and originally confirmed they had made 10 days ago.
• I cannot withdraw the amount (I want to close the account following this experience).
• Until TW's bank formally confirms cancellation of the transfer and an internal procedure completes, my funds will remain locked and unavailable to me. In effect TW have elected to borrow these funds from me for an indetermine period of time, free of charge. I have not authorised a loan to them. There is no guaranteed timescale for when my funds will be made available to me. Their relationship with their bank and their internal procedures are of no concern to me.

Actions:

• I have sent a formal complaint to them, which appears to demand a first response today, March 3. I have not received an acknowledgement.
• All I have asked for is the return of my own money - no compensation nor debit interest for the loan they have taken from me.
• It appears to me that TW have 30 days to respond to that complaint and could continue to hold those funds for that period. They maintain that until some internal procedure completes my funds will remain unavailable to me.

Question:

• Apart from instructing a solicitor to begin legal action, is there anything else I can do?

Thank you.

Aylesbury_Duck

Not really.  This is a business relationship so consumer rights don't apply, instead it's down to the terms and conditions of the business contract you have with TW.  If they've breached them and you're getting no response then yes, you could begin legal action.

born_again

Have you sent them the verification they require?

I think Barclays are the bank they use. So funds will be sat with them till proof is received. No one at the bank will confirm the issue but I can guess as to why.

Complaint or legal action will not get your funds back any quicker. They will go through their process, which at a guess until you provide the info they require will simply stall.
If it went to court, then they will argue that you have not provided the info required to proceed/refund with the transaction as they are required to ask for by law if they feel it is required.

MattMattMattUK

To me is sounds like the payment has triggered a fraud/AML flag, have you provided the additional information that they have asked for?

mark10525

I did send the ID they asked for. However I made it explicitly clear that the payment was not to be made, because - the invoice now late for payment - I had made payment from a different account.

TW did not make, and have not made, the payment.

The money presumably remains in their account with their bank however precisely where it is and the status of it is not my concern.

All that is required is for them to update the ledger balance on my TW account with a reveral of the transfer and the fees, thus making the money used to pay the transfer that never happened, available to me again.

MattMattMattUK

mark10525 said:

I did send the ID they asked for. However I made it explicitly clear that the payment was not to be made, because - the invoice now late for payment - I had made payment from a different account.

TW did not make, and have not made, the payment.

The money presumably remains in their account with their bank however precisely where it is and the status of it is not my concern.

All that is required is for them to update the ledger balance on my TW account with a reveral of the transfer and the fees, thus making the money used to pay the transfer that never happened, available to me again.

It will be if it triggers further fraud or AML flags which is likely what has happened. Fraud/AML checks usually take a week or two, very occasionally longer, once that is confirmed and they have sorted whatever triggered the flags and provided everything comes back clean they will return the funds and fees to your account.

Was the account you paid to a new account, a non-UK account? 

Ectophile

If you've managed to trip a money laundering red flag, then you may be in for a long wait.

The account would be frozen.  You would get no meaningful information from anybody about what is happening.  The money would only be released once the authorities are convinced that no money laundering is taking place.

mark10525

I would have thought people laundering money would be more ambitious than sending several amounts of between around £39.00 and £200.00.

The account from which the money is being sent is in GBP (so GBP > GBP) but has my Italian address. We're completing a move to Italy. I do have all the relevant documents for transacting business in Italy.

* The money has now finally been returned to my TW account. *

born_again

mark10525 said:

I would have thought people laundering money would be more ambitious than sending several amounts of between around £39.00 and £200.00.

The account from which the money is being sent is in GBP (so GBP > GBP) but has my Italian address. We're completing a move to Italy. I do have all the relevant documents for transacting business in Italy.

* The money has now finally been returned to my TW account. *

Glad you are sorted. You just have to allow them time to sort things.

 You may be surprised to know that ML can be of any amount.
Think of a street drug dealer. Are they going to pay in thousands of pounds in one go, or pass it to several people (mules) to pay smaller amounts in and then transfer to one account

mark10525

It's not quite sorted.

While the money had been put back into the Transferwise account I can't transfer any money out of it (e.g. back to myself) until I am "verified".

Original transfer instruction was 21st February.

Money returned to TW account on 4th March.

Received an email about "verification" on 8th March. Supplied ID same day.

And here we are on 10th March, day 17 since the failed transfer, with absolutely no sign of progress whatsoever.

I put in a formal complaint which apparently will receive a "final response" on the 15th March.

MattMattMattUK

mark10525 said:

It's not quite sorted.

While the money had been put back into the Transferwise account I can't transfer any money out of it (e.g. back to myself) until I am "verified".

There is something that has triggered a fraud/AML compliance issue for them then. Once those rules are triggered they have to follow the procedure until its resolution.

mark10525 said:

Original transfer instruction was 21st February.

Money returned to TW account on 4th March.

Received an email about "verification" on 8th March. Supplied ID same day.

And here we are on 10th March, day 17 since the failed transfer, with absolutely no sign of progress whatsoever.

I think two days after supplying the ID might be a bit premature to say "absolutely no sign of progress whatsoever". Either two things will happen now based on the ID you have provided, either within 5-7 days restrictions will be lifted and everything will return to normal, or you will be made aware of a greater issue and the account will be closed and/or the police will be contacted. 

mark10525 said:

I put in a formal complaint which apparently will receive a "final response" on the 15th March.

Seven days after the ID was supplied, which sounds about right based on how these processes are managed. They will either accept the ID as verification, or close the account as a fraud/AML risk.