The Crusader: She sent money to a wrong bank account, but who's to blame when it vanished?
WILL IT be a happy new year for a newly-wed whose small slip with an account number when making a payment online has plunged her into a world of worry and regret?
Fate dealt Laura Mallin a lousy hand when the £5,800 she was transferring to her parents, expenses connected with her wedding, ended up in a stranger’s account and then disappeared.
The jury is still out, literally as the case is now with the Financial Ombudsman, as to what happens next: whether Laura has to carry the can alone or if the services involved could have taken swifter action, given her more guidance and prevented the worst happening.
One thing is sure Laura’s not alone in mixing up numbers in the course of a digital transaction. However although so easily done, the simple description for the problem, known as ‘misapplied’ or ‘misdirected’ funds, gives no clue to the massive obstacles people face trying to recover their money.
Once cash arrives in an account it belongs to the holder, who needs to give their permission before any removal can take place.
That customer must have known it was a mistake that’s why they removed it so quickly
Crusader investigated a similar mistake some time ago that involved a deposit on a property just before a couple got married. Big events can strain the nerves and, when that situation meets the superfast world of electronic transactions, the results can be toxic.
But unlike the previous case, where a lot of the numbers were confused, Laura barely put a foot wrong.
She transferred the money, using a speedy payment option, on September 2 to a foreign exchange account that her parents were planning to use when they went on holiday.
When the money did not arrive Laura called her bank HSBC.
“It emerged although I had put the right name and sort code I had entered the reference number where I should have put the account one,” she told Crusader.
“I was reassured that it was probably in no man’s land and would bounce back shortly.
When that did not happen she called again and this time learned that it had landed in a Metro Bank account.
“The timescales, what Metro was doing, how long I must wait before taking further action were never made particularly clear to me and kept changing, despite my calling several times,” adds Laura.
“I got more and more worried. I’m not a Metro bank customer and it would not speak to me obviously about one of its customer’s accounts. I felt blocked on all sides.”
It was at that point she asked for Crusader for help. As a matter of urgency we asked Metro if it could investigate first as that was where the money was.
In our last investigation where the money had landed in a dormant account, the banks involved worked together immediately to freeze the funds while an inquiry was carried out.
While this did not guarantee the monies would be returned to the distraught couple, it did give them a fighting chance and stopped the money being spent.
Alas on October 17 Metro told Laura that it had received an alert from HSBC on September 22 after the account had already been emptied. Any further action would have to be through the Ombudsman.
“My money was stolen,” says Laura, “that customer must have known it was a mistake that’s why they removed it so quickly. My parents have been fantastic about this, but I feel terrible at what’s happened.”
Stop and do the £1 test before making big cash digital transfers
While consumers may blame themselves for a transaction error, the Ombudsman will consider complaints, advising: “We may find that the problem started because of something the consumer did. This does not, in itself, automatically mean that we will not uphold the complaint.”
New measures to protect consumers now being considered include a ‘confirmation of payee’. In the meantime review numbers and always try a £1 test run before making a full payment.
www.financial-ombudsman.org.uk/publications/technical_notes/wrong-account-payments.htm