Warning: Scottish Widows lost £20000 mortgage payment!

magicarpet

dunstonh said:

How is the bank preventing fraud by restricting payments from an account in my name to another account in my name?

How do they know its in your name?
An ISA surrender, for example, would be drawn on the bank of the ISA provider.  Your name won't appear on the cheque.

Seems to me more like the system is designed to create confusion and delay, during which time they rake in extra interest.

Seems to me that the system is designed to comply with anti-money laundering regs and reduce fraud.

I disagree with the above. In the digital age there is no reason payments shouldn't be traceable to the owner of the originating bank account. This would be the ultimate fraud deterrent. Terms such as ISA surrenders and complex regulations make it difficult for consumers to get things done whilst enabling the determined fraudster with a cloak of invisibility.

So the beneficiaries in the end are the banks who benefit from the delay, particularly when customer service is so poor, and financial advisers, who make their business from stepping in to help people navigate a badly designed system.

Twopints

Did you have a nominated account set up? And if so, why did you choose not to use it?

Hoenir

magicarpet said:

dunstonh said:

How is the bank preventing fraud by restricting payments from an account in my name to another account in my name?

How do they know its in your name?
An ISA surrender, for example, would be drawn on the bank of the ISA provider.  Your name won't appear on the cheque.

Seems to me more like the system is designed to create confusion and delay, during which time they rake in extra interest.

Seems to me that the system is designed to comply with anti-money laundering regs and reduce fraud.

I disagree with the above. In the digital age there is no reason payments shouldn't be traceable to the owner of the originating bank account. This would be the ultimate fraud deterrent. Terms such as ISA surrenders and complex regulations make it difficult for consumers to get things done whilst enabling the determined fraudster with a cloak of invisibility.

So the beneficiaries in the end are the banks who benefit from the delay, particularly when customer service is so poor, and financial advisers, who make their business from stepping in to help people navigate a badly designed system.

Never listen to conspiracy theorists. Complete waste of time. For an easy life best to just follow the laid out instructions. Saves endlessly creating problems to moan about. 

dunstonh

I disagree with the above. In the digital age there is no reason payments shouldn't be traceable to the owner of the originating bank account.

I disagree with you and I deal with ISA transfers and pension transfers and see the cheques and payments.   They rarely have the name of the beneficial owner on them.   Electronic transfers have the senders name. So, that will be the ISA provider.

The biggest risk with what you did is the third party (ISA provider) sending it to a lender that operates a collections account.    You could easily have lost the money for weeks whilst it sat there whilst people work out what to do with it or who it belongs to.

Your current account is your hub for money in and money out.    Trying to side swipe that is likely to cause all sorts of problems.

amnblog

magicarpet said:

amnblog said:

Point Two - makes sense.

Point One - Scottish Widows Bank use a nominated bank account of yours as the sole source to feed and draw from your Offset account. This is designed to protect you (and them) against fraud. Hence their system rejected funds from an unlinked account.

How is the bank preventing fraud by restricting payments from an account in my name to another account in my name?

Seems to me more like the system is designed to create confusion and delay, during which time they rake in extra interest.

The single nominated account system helps to prevent an unconnected and fraudulent third party draining your offset account.

The single nominated account system helps to prevent an unconnected and fraudulent third party 'washing' illicit funds through your offset account.

The single nominated account system helps to prevent one party in a joint mortgage from taking funds without the knowledge of the other.

Ksw3

In my job (not mortgages!) I've seen a handful of examples of people not knowing the T&Cs of their account I.e won't accept CHAPs or asking us to pay direct to a savings account which doesn't allow third party payments.

When I spot it I let them know but ultimately its not our responsibility to check. Its very easy to open a bank account and assume it caters for all transactions and transaction types. It's one of those things I think you learn through experience.