CHAPS payment failed to arrive

Ballard

Lloyds will have the sort codes loaded into their system so when the clerk types it in it should show ‘NatWest, High Street, Romford’ and they’ll manually check that against the form that the customer has filled out. This will populate the necessary BIC on the MT103. (This is all assumption on my part but it seems logical). I think that there’s still an option to populate the MT103 with free format but this is largely discouraged as it disrupts STP. 

This all makes a mockery of the confirmation of payee part though.

eskbanker

OceanSound said:
I was going by the form available on the Lloyds corporate website.

No idea if the UK consumer version differs but that one's actually issued by the Jersey-based Lloyds Bank International Ltd....

Ballard

eskbanker said:

OceanSound said:
I was going by the form available on the Lloyds corporate website.

No idea if the UK consumer version differs but that one's actually issued by the Jersey-based Lloyds Bank International Ltd....

I did a brief Google earlier and another bank (Barclays if memory serves correctly) also claim that they check. If there’s a system in place they should all be using it as it’s there to prevent fraud/mistakes. 

phillw

Ballard said:

This all makes a mockery of the confirmation of payee part though.

Not really, COP was mostly introduced to deal with fraud.
It also prevents user mistakes, banks can misplace money regardless of what systems are in place.

OceanSound

I think what was meant was that the user having the Confirmation of Payee (COP) becomes pointless (at least the preventing user mistakes aspect) if a bank staff member then goes on to enter a wrong sort code, thereby causing the CHAPS payment to go astray.

As for banks misplacing money regardless of what systems are in place, I'll be using a similar analogy if I'm ever pulled over for not wearing a seat belt. Why wear a seat belt when there are tons of other ways to become injured that a seat belt wouldn't necessarily prevent?   

MarkC61

masonic said:

xylophone said:

It does on the face of it look like Lloyds held it up for fraud checking, and they weren't willing to let it through and therefore re-credited it to your father's account. 

But in that case, how came it that Starling is alleged to have deducted £50?

How could they deduct a fee (?) from money that they didn't receive? 

I'm making the assumption that MarkC61 and his father are now down a total of £80 ....

Correct @masonic
But I'll get it all back. And more!

phillw

OceanSound said:

As for banks misplacing money regardless of what systems are in place, I'll be using a similar analogy if I'm ever pulled over for not wearing a seat belt. Why wear a seat belt when there are tons of other ways to become injured that a seat belt wouldn't necessarily prevent?   

You wear a seat belt so that it improves your chance of survival, like COP improves your chances.

Failures of either, don't make a mockery of them.

OceanSound

phillw said:

OceanSound said:

As for banks misplacing money regardless of what systems are in place, I'll be using a similar analogy if I'm ever pulled over for not wearing a seat belt. Why wear a seat belt when there are tons of other ways to become injured that a seat belt wouldn't necessarily prevent?   

You wear a seat belt so that it improves your chance of survival, like COP improves your chances.

Failures of either, don't make a mockery of them.

It wasn't COP that failed though. It was one of the links in the chain (process). You are the weakest link. .....If we manufacture one of the best seatbelts in the world to improve our chances of survival, it's no good if the fastening mechanism (where the belt joins the buckle where it fastens) is less than stable.

The dodgy fastening mechanism makes a mockery of the seatbelt. Generally, it may prevent most injuries and casualties, but sometimes it doesn't. With the CHAPS debacle, someone could lose out on a house purchase. All because one of the links was duff - in the otherwise strong chain. That makes a mockery of seatbealts in general, because, that's not its intended purpose. The same as COP was intended to prevent errors when inputting sort code and account number. It does that for the user, but if it doesn't do that somewhere else, then what's the point of having that safeguard in the first place (even if it does other stuff - it still becomes a laughing stock)

MarkC61

xylophone said:

Has your father been offered an apology, repayment of the £50 fee and compensation for the worry and inconvenience caused?

Not yet @xylophone

masonic

OceanSound said:

phillw said:

OceanSound said:

As for banks misplacing money regardless of what systems are in place, I'll be using a similar analogy if I'm ever pulled over for not wearing a seat belt. Why wear a seat belt when there are tons of other ways to become injured that a seat belt wouldn't necessarily prevent?   

You wear a seat belt so that it improves your chance of survival, like COP improves your chances.

Failures of either, don't make a mockery of them.

It wasn't COP that failed though. It was one of the links in the chain (process). You are the weakest link. .....If we manufacture one of the best seatbelts in the world to improve our chances of survival, it's no good if the fastening mechanism (where the belt joins the buckle where it fastens) is less than stable.

The dodgy fastening mechanism makes a mockery of the seatbelt. Generally, it may prevent most injuries and casualties, but sometimes it doesn't. With the CHAPS debacle, someone could lose out on a house purchase. All because one of the links was duff - in the otherwise strong chain. That makes a mockery of seatbealts in general, because, that's not its intended purpose. The same as COP was intended to prevent errors when inputting sort code and account number. It does that for the user, but if it doesn't do that somewhere else, then what's the point of having that safeguard in the first place (even if it does other stuff - it still becomes a laughing stock)

A perfect seatbelt can never be expected to prevent you from drowning if you veer off the road into a lake. This error seems to have come about due to a manual transcription error after the transfer request was submitted and authorised. Human error can never be eliminated, but all reasonable steps should be taken to prevent numbers being manually transcribed by a human.

COP is there to give people an added layer of confidence to account holders that they are not sending their money to a fraudster or unintended recipient. It served its purpose in that it demonstrated that the OP's father had not made a mistake or been misled about the bank details. I could be used as evidence the OP's father gave the correct details, which is useful when in a dispute with the bank. Far from making a mockery of COP, this episode demonstrates that it is not being used where it perhaps should: when bank staff are in control of a payment. It would certainly have prevented this error if used at the point of sending the money out of Lloyds. After all, in a crash, a driver wearing a seatbelt can still be badly injured by a passenger behind them who isn't.