Balance transfer misdirected to another account £4k - please help

eskbanker

sarahern said:

Ok thanks can i check is misdirected payments process different to confirmation of payee. Does anyone have the code? Its not accesible on the internet strangely enough!

Yes, a formalised misdirected payments process was introduced in 2016, superseding an earlier 2014 code of conduct - it's explained at https://www.fasterpayments.org.uk/consumers/what-happens-if-i-have-sent-payment-wrong-place

Its launch announcement is no longer on the FP site but is visible at https://web.archive.org/web/20201022121349/http://www.fasterpayments.org.uk/press-release/new-help-customers-recover-payments-sent-error

Confirmation of Payee is a different initiative, introduced last year, and only adopted so far by a small number of large banks.

p3ncilsharpener

pbartlett said:

I am new to this thread, but if I understand correctly the OP applied for a balance transfer with Sainsburys, and whilst typing in their Barclaycard account did a typo and the money went to someone else's credit card instead.

The thing that jumps out at me is this is highly unlikely as credit card numbers are checksummed and a typo would result in an invalid card. Thus it seems likely that the OP did input the correct card details. 

So Sainsbury's made a typo and it magically went to a valid card?

Why is the OP's typo unlikely to go to a valid card but Sainsbury's was?

eskbanker

pbartlett said:

The thing that jumps out at me is this is highly unlikely as credit card numbers are checksummed and a typo would result in an invalid card.

You can't say that a typo definitely would result in an invalid card, but it could....

pbartlett

I am saying a typo is unlikely to result in a valid card.

I think it is more probably that Sainsburys sent it to a completely different card than that a typo generated a valid number.

Thrugelmir

pbartlett said:

I think it is more probably that Sainsburys sent it to a completely different card than that a typo generated a valid number.

Then the original complaint would have been upheld. Sainsburys are obviously satisfied that their internal processes have been followed. There'll be a number of checks and balances in place to ensure such events don't happen. 

p3ncilsharpener

FWIW an FOS decision in a similar case https://www.financial-ombudsman.org.uk/files/295068/DRN-2430776.pdf

eskbanker

p3ncilsharpener said:

FWIW an FOS decision in a similar case https://www.financial-ombudsman.org.uk/files/295068/DRN-2430776.pdf

Not good news for OP, in that the ombudsman considered that attempting a recall (and chasing), as Sainsbury's did here, was effectively all that the sending bank could reasonably be expected to do - the sending bank's lack of validation of recipient's name wasn't felt to be significant.

Having said that, there may be detailed differences:

• in the FOS decision, the sending bank tried the recall 'within a reasonable timeframe', but Sainsbury's may not have done
• Halifax's Ts & Cs made specific reference to their lack of responsibility and 'best endeavours' response level in such scenarios, whereas Sainsbury's may not
• Halifax provided FOS with screenshot evidence of the incorrect request, but Sainsbury's may not have this

so it may not completely wipe out the prospect of a result from FOS, but in general it does seem a very close fit and so likely to be a precedent.

p3ncilsharpener

eskbanker said:

p3ncilsharpener said:

FWIW an FOS decision in a similar case https://www.financial-ombudsman.org.uk/files/295068/DRN-2430776.pdf

Not good news for OP, in that the ombudsman considered that attempting a recall (and chasing), as Sainsbury's did here, was effectively all that the sending bank could reasonably be expected to do - the sending bank's lack of validation of recipient's name wasn't felt to be significant.

Having said that, there may be detailed differences:

• in the FOS decision, the sending bank tried the recall 'within a reasonable timeframe', but Sainsbury's may not have done
• Halifax's Ts & Cs made specific reference to their lack of responsibility and 'best endeavours' response level in such scenarios, whereas Sainsbury's may not
• Halifax provided FOS with screenshot evidence of the incorrect request, but Sainsbury's may not have this

so it may not completely wipe out the prospect of a result from FOS, but in general it does seem a very close fit and so likely to be a precedent.

I don't think that's going to work.  The Ombudsman also said "I can’t see that Halifax have any authority here to demand the return of the balance transfer" i.e. it's not really up to them.

I suspect if Sainsbury's were deemed to have acted too slowly it'll be compo and that's it., I can't see that their tardiness had any effect on the outcome.  Barclaycard need the permission of the customer to take the money back so even if the money was still there it wouldn't make any difference, their actions rather make it clear they wouldn't give permission (or would object to the transfer.)

In other news, I also found this case when searching https://www.financial-ombudsman.org.uk/files/102433/DRN3974707.pdf . I bet they have a laugh at times over at the FOS.

eskbanker

p3ncilsharpener said:

I don't think that's going to work.  The Ombudsman also said "I can’t see that Halifax have any authority here to demand the return of the balance transfer" i.e. it's not really up to them.

I suspect if Sainsbury's were deemed to have acted too slowly it'll be compo and that's it., I can't see that their tardiness had any effect on the outcome.  Barclaycard need the permission of the customer to take the money back so even if the money was still there it wouldn't make any difference, their actions rather make it clear they wouldn't give permission (or would object to the transfer.)

It's still not clear to me whether the misdirected payments process applies to this or not, in the light of the information that Sainsbury's use Faster Payments for such transfers.

If it does apply, then the sending bank has an obligation to attempt a recall within two working days, so if (say) they took a week, that might be considered unreasonable and a contributory factor in the lack of success, in that the sending bank "will contact the receiving bank on your behalf with a request to prevent the money being mistakenly spent", so if Sainsbury's delayed a request, during which time the recipient withdrew the money, it would have prevented Barclaycard from acting proactively to freeze the amount concerned, regardless of the (later) lack of cooperation from the recipient.

I note that FOS makes no reference to the misdirected payments process in that decision though....

p3ncilsharpener

eskbanker said:

p3ncilsharpener said:

I don't think that's going to work.  The Ombudsman also said "I can’t see that Halifax have any authority here to demand the return of the balance transfer" i.e. it's not really up to them.

I suspect if Sainsbury's were deemed to have acted too slowly it'll be compo and that's it., I can't see that their tardiness had any effect on the outcome.  Barclaycard need the permission of the customer to take the money back so even if the money was still there it wouldn't make any difference, their actions rather make it clear they wouldn't give permission (or would object to the transfer.)

It's still not clear to me whether the misdirected payments process applies to this or not, in the light of the information that Sainsbury's use Faster Payments for such transfers.

If it does apply, then the sending bank has an obligation to attempt a recall within two working days, so if (say) they took a week, that might be considered unreasonable and a contributory factor in the lack of success, in that the sending bank "will contact the receiving bank on your behalf with a request to prevent the money being mistakenly spent", so if Sainsbury's delayed a request, during which time the recipient withdrew the money, it would have prevented Barclaycard from acting proactively to freeze the amount concerned, regardless of the (later) lack of cooperation from the recipient.

I note that FOS makes no reference to the misdirected payments process in that decision though....

It won't.  The page you linked talks specifically about bank accounts.  The payment itself wasn't misdirected, it went exactly where it was supposed to go (to Barclaycards bank account.)