Starling Bank - CIFAS Marker For Bank Transfer - False Instrument(s) Paid In

TojoRalph

I am hoping that someone has an understanding of CIFAS Markers and how a bank transfer can be viewed as and result in a Misuse of facility and “False Instrument(s) Paid In” marker?. I ask because looking at the various information, false Instruments require a physical document, a fake/false driving license, bank note, stamp, falsified cheque, passport, Etc?

So to explain the circumstances. My relative transfered money from Bank A (an account in their name) to Starling Bank (an account in their name). Two weeks later, in relation to that transfer, they were asked by Starling Bank to explain their relationship with the Bank A account holder and the origin of the funds. They explained that a) They were the account holder and the account was in their name, b) They were transferring their own money to themselves with the money being partially the proceeds of a cryptocurrency sale of funds held on Binance. In addition they sent screenshots of their Bank A account showing the transfer to Starling Bank. In replying my relative also asked Starling Bank for any details they could give as to whether there was an issue? Starling Bank replied advising them that Bank A had disputed the transaction. 

Having heard nothing from Bank A to suggest there was any issue with the transfer from their account two weeks prior, my relative contacted Bank A. Bank A checked and double checked and confirmed that there was absolutely no issue with the transaction, that the money had been transfered to Starling Bank from their account and that the transfer had completed. My relative then contacted Starling Bank and provided a copy of the dialogue with Bank A in which Bank A disputed Starling Banks claims that they had disputed the transaction and confirmed there was no issue with the transaction. 

Two days later Starling Bank advised my relative that their account was being closed and their full balance would be forwarded to them by cheque. It should be noted that the full balance value mentioned included the money relating to the "disputed" transfer from Bank A, or rather that Starling Bank claimed was disputed by Bank A.

Having read everything in relation to this issue, I advised my relative to get a CIFAS report "just in case" and lo and beholf, there on their account, placed by Starling Bank, was a marker for Misuse of facility and False Instrument(s) paid in with the transfer value listed in the financial loss section under value of credits. Needless to say, having contacted Starling Bank, they were advised the bank were unable to discuss.

I appreciate that banks aren't obliged to explain themselves and wont provide more info than they have to, which is fair enough and I have explained this, but I cannot make any sense of it? Any thoughts as to what I am missing?

molerat

The only thing they can do is raise a formal complaint and take it to the FOS and ICO if necessary.

kaMelo

I agree, raise a formal complaint with bank B. The bar for a CIFAS marker is very high, the bank needs to have more than a suspicion or concern. It has to show it had reasonable grounds to believe that a fraud or financial crime had been committed or attempted and that the evidence they have would support this being reported to the relevant authorities.

Hearsay from bank A does not reach that threshold, I don't see any way that bank B has enough evidence to show a financial crime happening or being attempted, it  has simply received a transfer from an account belonging to the same person at bank A.
It might be a different story if it was bank A doing the questioning and placing a marker as they received the transfer from a crypto exchange.

eskbanker

Does bank B have a published (anti-)crypto policy?  If they were made aware of the origin of the money and considered the A to B transfer as a way of circumventing this then I can perhaps understand an account closure, but that shouldn't have gone as far as a CIFAS marker, and doesn't explain the alleged dispute raised by A.

TojoRalph

molerat said:

The only thing they can do is raise a formal complaint and take it to the FOS and ICO if necessary.

I have helped them draft up their complaint tonight, ensuring that it's clear, concise, factual and to the point. Thanks.

TojoRalph

kaMelo said:

I agree, raise a formal complaint with bank B. The bar for a CIFAS marker is very high, the bank needs to have more than a suspicion or concern. It has to show it had reasonable grounds to believe that a fraud or financial crime had been committed or attempted and that the evidence they have would support this being reported to the relevant authorities.

Hearsay from bank A does not reach that threshold, I don't see any way that bank B has enough evidence to show a financial crime happening or being attempted, it  has simply received a transfer from an account belonging to the same person at bank A.
It might be a different story if it was bank A doing the questioning and placing a marker as they received the transfer from a crypto exchange.

Those were my thoughts exactly with regards to it making more sense if Bank A had raised the concern. However to clarify, whilst the money origins were the proceeds of a crypto sale on Binance, the payment for that sale is/was received by Bank A via a GBP bank transfer from a UK bank.

Then two weeks after Bank A completed the transfer of that money to Starling Bank, it was Starling Bank who raised the concern. As I mentioned, they did so stating that Bank A had "disputed the payment". How or why would a bank making a payment then dispute it two weeks later? On what grounds even?

Somewhat strangely, or so I thought, Starling Bank asked my relative if they had any "insight as to why Bank A had disputed the transaction". Surely if Starling Bank had received notification from Bank A that the transaction was disputed, Bank A would have explained to Starling Bank why it was being disputed? If not, surely Starling Bankmshould be asking Bank A why the transaction was being disputed, not my relative? Time will tell I guess. Thanks.

TojoRalph

eskbanker said:

Does bank B have a published (anti-)crypto policy?  If they were made aware of the origin of the money and considered the A to B transfer as a way of circumventing this then I can perhaps understand an account closure, but that shouldn't have gone as far as a CIFAS marker, and doesn't explain the alleged dispute raised by A.

I had a look and Starling Bank states they do not support the buying/selling of crypto by debit card, or bank transfer. A point to note is that the proceeds of the Binance Crypto sales are not paid in Crypto from the exchange but paid in GBP via bank transfer, so even bank A did not receive any crypto. Bank A received GBP and GBP was paid out from bank A via bank transfer to Starling Bank.

Fully agree on the account closure part, their ball, their rules, judge, jury and executioner with no explanation when it comes to closure. But the marker?

I mentioned in an earlier reply that Starling Bank asked my relative if they had any "insight" as to why bank A had raised the dispute. To me that appears strange as surely Bank A would explain to Starling Bank why they raised a dispute and if Starling Bank had questions, Bank A are the one with the answers? Starling Bank also suggested my relative "reach out" 🙄 to Bank A and ask. This they had done already, with Bank A responding that they had not disputed the transaction.

Regards the CIFAS marker, it implies that there was a financial loss equal to the transfer value. But a loss by who? Not my relative as Starling Bank have confirmed the full balance to be sent by cheque includes the disputed transaction money. Not by Bank A as they have zero issues. So that leaves Starling Bank who filed the marker? But how can Starling Bank have made a loss equal to the value of the money transferred? Who can they have lost it to? And if they had made a loss as a result of fraud on the part of my relative, why are they giving my relative all of their money including the "disputed" money transferred? 

Answers on a postcard please. 😀

TojoRalph

Just to update. Having submitted their complaint to Starling Bank on the 11th Aug, my relative has now had an initial call and discussion with their complaints handler. Despite the call lasting 50 minutes, they are still none the wiser as to what the bank has judged that they are guilty of as the bank gave no additional detail. The only point to note is that in closing the phone call the complaint handler advised that the case had a response time of 8 weeks per FOS/FCA procedures. My relative responded by highlighting that as this was a PSD complaint, the timeline for resolution or final response should be 15 working days, not 8 weeks. Starling Bank have now accepted this timeline and confirmed as such in writing.

TojoRalph

@molerat @eskbanker @kaMelo Just to update as you were good enough to comment. Yesterday my relative received a "Final Response" message from Starling Bank advising that the complaint was upheld, the CIFAS marker has been "removed in its entirity", that Starling Bank apologised for any "inconvenience" offering £100 and that Starling Bank thanked my relative for the, "opportunity to revisit this matter on your behalf". Call me a sceptic, but I somehow doubt that thank you was in any way sincere . On the plus side, the final response to the complaint was received 10 working days after the complaint was submitted and Starling Bank saw no need for an initial response.

As for the rest of the letter, it was a lesson in corporate buzzword bingo with hints of AI. Lots of copy/paste column inches, but no meaningful content. Tired phrases such as, "passed to our dedicated team... our specialist team ... the appropriate team ... our internal investigation... full review". What was missing was any answers to the list of questions detailed in the complaint or any explanation or even a hint as to why the marker was placed. 

Needless to say my relative is now in the process of drafting a detailed complaint to the FOS. Prior to submitting their complaint, they will submit a data subject access request to both Bank A and Starling Bank. Whether they will ever get any answers or whether or not they will get to the truth I doubt it, but one has to try. 

Section62

TojoRalph said:

Needless to say my relative is now in the process of drafting a detailed complaint to the FOS. Prior to submitting their complaint, they will submit a data subject access request to both Bank A and Starling Bank. Whether they will ever get any answers or whether or not they will get to the truth I doubt it, but one has to try. 

Tell them not to make it too detailed - FOS are very busy and there's a good chance the investigator and/or ombudsman will only skim read part of the complaint and make a decision based on that.  Keep the submission succinct, and stick to the key points.

Also, note the FOS are not there to 'police' the banks, only to see whether a fair resolution has been achieved.  Their idea of what a fair amount of compensation might be is trivially small.  As they have reversed the 'error' and given some compensation, FOS won't necessarily agree that more should be done. You also have 6 months from the date of the 'final response' to take the complaint to FOS, so there's no need to rush... it may be worth waiting to see what the SAR throws up (and how it is handled) before starting the FOS process.

TojoRalph

Section62 said:

TojoRalph said:

Needless to say my relative is now in the process of drafting a detailed complaint to the FOS. Prior to submitting their complaint, they will submit a data subject access request to both Bank A and Starling Bank. Whether they will ever get any answers or whether or not they will get to the truth I doubt it, but one has to try. 

Tell them not to make it too detailed - FOS are very busy and there's a good chance the investigator and/or ombudsman will only skim read part of the complaint and make a decision based on that.  Keep the submission succinct, and stick to the key points.

Also, note the FOS are not there to 'police' the banks, only to see whether a fair resolution has been achieved.  Their idea of what a fair amount of compensation might be is trivially small.  As they have reversed the 'error' and given some compensation, FOS won't necessarily agree that more should be done. You also have 6 months from the date of the 'final response' to take the complaint to FOS, so there's no need to rush... it may be worth waiting to see what the SAR throws up (and how it is handled) before starting the FOS process.

It is interesting that you say the ombudsman are not there to 'police' the banks, only to see that the bank addressed the complaint fairly. They/I had assumed (and hoped) that the ombudsman would look at the circumstances of the original decision to see if Starling Bank had followed due process or been cavalier and arbitrary in filing the CIFAS marker. From what you say the Ombudsman will acknowledge Starling Bank removed the marker and focus only on the Final Decision and whether the compensation offered was adequate? If that is the case, whilst keeping the Ombudsman complaint short and sweet, it will need to clearly detail the extent the marker has negatively impacted my relative?

Regards the SAR's, as you say, hopefully they will throw something up as I have read comment that the ombudsman may not accept the assumption that other bank accounts held for years that get shut by the bank within 5 days of a CIFAS marker being placed, were shut as a result of the CIFAS marker. So regards SAR's requests will also be sent to the banks and their sole credit card provider who closed their accounts in the aftermath of the CIFAS marker being filed. My relative is still talking to two banks with regards to getting funds released from two accounts due to close. So given that the marker that caused the closure has been lifted, they are also going to see what info they can leverage there. They don't expect either bank to allow them to reopen an account as it seems you remain guilty despite being proven innocent, but they will be highlighting the marker was removed, forward a copy of the decision and see what either bank will say. 

Lastly, would you suggest they withdraw the £100 placed into their account by Starling Bank? My concern was that would be viewed as accepting the banks decision? The account is due to close in 3 days.  Thank you.