SWIFT payment gone missing

masonic

Ballard said:

masonic said:

Based on the limited information you provided, it would be a reasonable deduction that your money is being held offshore, so as per FCA regulations Bank A would be operating in the UK through a subsidiary, which would be the FCA authorised entity in this case. The use of SWIFT as the primary means of transfer to UK current accounts would tend to put its centre of operations outside of the EEA. It would then come down to whether they are large enough to be able to route payments to the UK using their own banking infrastructure, or whether they are dependent on other foreign banks to route the transfer and which ones.

I'm not familiar with many banks set up like this. The only one I've had any experience with is Fineco, which is Italian and therefore uses SEPA transfers to move money around. However, I am aware of an FCA authorised subsidiary of a Russian owned investment firm operating in the UK.

The last three banks I’ve worked for used SWIFT as the sole means to transfer customer funds domestically. One was a branch of an overseas bank but the other two are UK banks. Your assumption may turn out to be true but it is just an assumption. 

I am surprised by that. I've always associated SWIFT with international money transfers, and it is usually the most expensive type of transfer. A £1 test transfer would be quite a luxury over SWIFT I would think when compared with BACS and FP. Out of interest, at these banks you worked for, were customers able to make SWIFT transfers for free?

To be fair, I think it is all just guesswork at this stage, and Band7 may never find out the reason for the payment bouncing back.

Ballard

Out of the three banks I was only involved in customer transfers at one and we did charge £25 each for them (although bigger customers received a discount). I don’t know about the charges at the other two banks. 

I should point out that none of these banks were aimed at the retail market. We did receive faster payments and bacs at the one bank but didn’t have the facility to pay via that route. 

Band7

masonic said:

I am surprised by that. I've always associated SWIFT with international money transfers

Doesn't CHAPS use SWIFT?

Band7

NB. My payment was definitely not a CHAPS payment.

flaneurs_lobster

You may be confusing SWIFT message formats (the MT103 for example) with SWIFT the secure message transfer network.

Nothing to stop a bank (or anyone else) using the message format to send a payment instruction to another party, be it over SWIFT, private or public networks or printing it out and putting it in an envelope. 

Band7

flaneurs_lobster said:

You may be confusing SWIFT message formats (the MT103 for example) with SWIFT the secure message transfer network.

Nothing to stop a bank (or anyone else) using the message format to send a payment instruction to another party, be it over SWIFT, private or public networks or printing it out and putting it in an envelope. 

Don't think I am confusing anything. According to the BoE, CHAPS uses the SWIFT system. 
https://www.bankofengland.co.uk/-/media/boe/files/payments/chaps/chaps-technical-requirements.pdf

masonic

Band7 said:

Doesn't CHAPS use SWIFT?

CHAPS does use the SWIFT messaging system, but it is a separate club of only a few dozen direct members as opposed to 11,000 SWIFT member institutions. As I understand it, CHAPS provides more certainty of payment settlement by placing additional requirements on member banks than a typical SWIFT transfer would, including the inability to recall a payment after it is sent.

In an analogous manner, Direct Debits piggyback on the BACS transfer system.

There are probably a couple of reasons why consumers don't tend to encounter standard domestic SWIFT transfers in retail banking: 1) CHAPS is de rigueur for high value or guaranteed money transfers; and 2) there is an expectation that other types of transfers should be made free of charge, so banks opt for something more cost-effective than SWIFT, even if that means using the services of another clearing bank.

HobgoblinBT

OP, you may be able to find the reason for the missing £25 by scrutinising the relevant high street bank’s terms and conditions and/or charges tariff for overseas payments.  One I have looked at online refers to passing on any charges for agent banks which could explain why the returned funds are £25 short.

Band7

HobgoblinBT said:

OP, you may be able to find the reason for the missing £25 by scrutinising the relevant high street bank’s terms and conditions and/or charges tariff for overseas payments.  One I have looked at online refers to passing on any charges for agent banks which could explain why the returned funds are £25 short.

Yes, I think you are spot on. For some unknown reason (though it seems to be BE01, strangely), bank B decided to return the payment. As it was sent by SWIFT, and because they charge £25 for SWIFT payments, they pocketed some of my money. I am waiting for them to admit this though at the moment, they are still denying everything. I am confident they will cave in, as they had absolutely no legit reason for rejecting the payment. They have so far also been unable to explain why they notified me that I had received the payment, but then decided to reject it, and not tell me that they have done so.

BE01 means, I think, that the recipient name on the incoming payment is not the name on the beneficiary account. Some sort of a COP upon receipt of a payment. I don’t think they’d have a leg to stand on if they had decided to implement this “COP” without changing their T&Cs accordingly, but even with a T&C change, this would be an illogical thing to do.

Anyway, we’ll see whether they come to their senses or whether I have to take them to the FOS first.

masonic

Band7 said:

HobgoblinBT said:

OP, you may be able to find the reason for the missing £25 by scrutinising the relevant high street bank’s terms and conditions and/or charges tariff for overseas payments.  One I have looked at online refers to passing on any charges for agent banks which could explain why the returned funds are £25 short.

Yes, I think you are spot on. For some unknown reason (though it seems to be BE01, strangely), bank B decided to return the payment. As it was sent by SWIFT, and because they charge £25 for SWIFT payments, they pocketed some of my money. I am waiting for them to admit this though at the moment, they are still denying everything. I am confident they will cave in, as they had absolutely no legit reason for rejecting the payment. They have so far also been unable to explain why they notified me that I had received the payment, but then decided to reject it, and not tell me that they have done so.

BE01 means, I think, that the recipient name on the incoming payment is not the name on the beneficiary account. Some sort of a COP upon receipt of a payment. I don’t think they’d have a leg to stand on if they had decided to implement this “COP” without changing their T&Cs accordingly, but even with a T&C change, this would be an illogical thing to do.

Anyway, we’ll see whether they come to their senses or whether I have to take them to the FOS first.

Do you have any way of verifying that previous payments you made were also via SWIFT? That would be the final nail in the coffin for bank B assuming you are correct that bank B deducted a fee (and it was not, for example, bank A no longer absorbing the cost of the payment due to it being rejected).