Bank Avoiding Duty of Care on Lost Payments

HanburyHelm

Private landlord here.
I've got a few BTL properties, get rents paid into my account monthly via bank transfer
Got long term tenants who have always been good, always paid etc.
I did an audit on rents received recently, shocked to see that no rent received from one of the flats for 2 years! Missed seeing this as the tenant has a very similar name to one of the others, so would see a deposit and assume it was the one I was thinking about! Stupid mistake, but here we are.
Spoke to the tenant, (single parent, Eastern European) they were shocked too as they say they have been making monthly payments all the time from their bank.
They spoke to the bank, and apparently the bank has said there is nothing they can do, go report it to the police. Now shes stressing out over the very significant figure involved and looking to get a second job etc etc etc. Obviously she has a problem here but in reality its pretty much my problem as its me who is out of pocket.

Surely the bank has a duty of care here? I'm not sure yet if the bank has just been sending the money elsewhere by mistake, or if (more likely) there has been a hacker taking the money, but aren't high street banks set up to safeguard and return customers' money in the event of a hack? 
I've told the tenant to get another interview with the bank and I'll go along with her. Her english is quite good but not sure if the bank is just fobbing her off. If go to meet with her I can help with the explanation of whats happened and see how the money has disappeared.

It would be good to know though ahead of time exactly what the responsibilities are of the bank, so any helpful comments would be appreciated!! Thank you!

sausage_time

Had you ever received payments from that tenant?  How do they pay?   Did your bank account details change (or did they change where they payments were being sent - and if so under what circumstances?)

eskbanker

Obviously I don't know the person involved but personally I'd suspect that the tenant hasn't been making the payments, rather than the bank somehow sending them into some sort of black hole or being hacked!

It'll be revealing to see if she offers any resistance to you accompanying her to the bank, but if you do go then that should unearth more of the true story of what's happened and you/she can take it from there....

Edit: have you seen any credible evidence of the payments being made, such as bank statements, etc?

Perhaps I'm being unduly cynical, but two years ago was exactly when inflation (and energy prices in particular) was spiralling rapidly, so many would have suddenly found their finances much more stretched - I can easily envisage the scenario where someone falls behind on their rent and continues to do so when they're not picked up on it.

Momanns

You are making a lot of assumptions. Guessing this isn't genuine or some kind of weird fraudulent attempt. What landlord doesn't notice rent for two years.

Your tenant can check the details of where they have been sending the funds via mobile or online banking. If they are not technically minded, the bank should be able to help in person. Money does not just go missing into the ether. There is no "hack".

Why are you allowing your tenant to get stressed and look at second jobs if you are a) incapable of basic administration and b) wealthy enough not to notice two years worth of rent.

mark_cycling00

Your tenant has accidentally sent payment to the wrong account details but you didn't inform her that her rent was missing, so she assumed everything was ok and kept paying into this account?

born_again

So as far as tenant is concerned bank has made payments to details you provided & they entered. As far as payments go that is the end of the matter.
If they entered the wrong details it is tenants fault.
All they can do is contact their bank & get them to contact receiving bank & see if the funds are still in account paid into. But is that account holder does not respond. Then the only way to get it back would be for your tenant to go to court to get the receiving bank to release their customers details, so they then could take them to court for the funds. If any left.

Personally as you have not noticed for 2 years ( tenant has a very similar name to one of the others) is not really a good excuse for a business.
But you need to see their bank statements for this period to ensure that they have made the payments. 

Brie

born_again said:

So as far as tenant is concerned bank has made payments to details you provided & they entered. As far as payments go that is the end of the matter.
If they entered the wrong details it is their fault.
All they can do is contact their bank & get them to contact receiving bank & see if the funds are still in account paid into. But is that account holder does not respond. Then the only way to get it back would be for your tenant to go to court to get the receiving bank to release their customers details, so they then could take them to court for the funds. If any left.

Personally as you have not noticed for 2 years ( tenant has a very similar name to one of the others) is not really a good excuse for a business.
But you need to see their bank statements for this period to ensure that they have made the payments. 

I would be less than happy of handing over my bank statements that show all my spending to some LL who hasn't kept good accounting records.  I wonder if it falls under some data protection rules?  

I think that this is the sort of thing that the OP needs to just swallow and move on.  How much is the s/he out of pocket?  Possibly £20k (assuming this is a basic rental not luxury)??  How can someone not notice their income dropping by that amount?

It would be great if the tenant and their bank can track down the money and get it back and into the right hands but if not and the tenant or their bank can prove the money has been paid out every month I don't think there's much can be done about it now.  

born_again

While I get your point on data protection, I don't think it would be a issue, as landlord already holds details of them via contracts. From the tenants point of view it shows they have paid & puts ball back in OP's court.
Of course they could have been paying it to one of their own accounts as a scam. Which has been helped by 2 years of not noticing by landlord.

Neil49

I'm guessing that the tenant doesn't use Internet banking otherwise they could simply log on to their account and check the payment instructions.

The first step is for the tenant to request the bank to provide the sort code and account number relating to the payment so that the OP can confirm it is correct (or not). 

Ergates

HanburyHelm said:

 or if (more likely) there has been a hacker taking the money,

By what stretch of the imagination is a "hacker" more likely than someone making a mistake?

The question is - who made the mistake, and who should bear the brunt of the responsibility.

The most likely source of error is that the tenant entered the wrong details into their payment.  However, given it's been 2 years and *you didn't tell them* then I would argue that you should shoulder some of the responsibility there.

xylophone

How long has this lady been your tenant?

Are you saying that she became your tenant two years ago and you did not take the trouble to check that she had started paying the rent?

Surely you would audit at least annually for purposes of your tax return? You are after all running a business.