“I lost my inheritance with one wrong digit on my sort code”
theguardian.com
theguardian.com
18-year-old me had an account with the Halifax, then a building society. One week, £50 appeared in this account. I knew it wasn't for me, and didn't want to spend it as I knew I'd have to give it back at some point. (I'd asked my girlfriend's dad, a lawyer who worked for the Crown Prosecution Service, if I could just keep it. He compared it to someone parking their car on my driveway. They shouldn't leave it there, but that doesn't mean it becomes my car.)
I wrote – on paper, in an envelope – to the Halifax. They said they'd do something about it. They didn't, and a month later another fifty quid arrives. This went on for a few months, from memory. When they finally sorted it, I pointed out that another bank (HSBC?) was, at the time, offering a £25 'sorry, we screwed up' payment. I suggested that they might like to send me £25.
The manager wrote back and told me that as 'no inconvenience or cost was incurred by me' as a result of this error, he didn't see why he should give me £25. Looking back, this event shaped how I feel about corporations, about how the 'little guy' is treated. I was fucking furious, so I meticulously detailed all of the costs, including my time at the minimum wage of the day, and put them in a letter. I mean down to the cost of the envelopes, the stamps, and the landline calls that I'd made. Everything, itemised. It was beautiful.
I called and got the manager on the phone. I explained my stance, and read through each line of the letter I was about to send. "Do you agree that this was a cost incurred by me?", I asked after every line. He couldn't disagree. I think the total was somewhere around £60. I finished the call by saying that he'd be getting this detail in the mail, and that it wasn't a letter this time, it was an invoice. Then – oh man, I remember this – I just hung up on him.
They sent me a cheque.
If our Internet cuts out and I have to call in to get it fixed I calmly but firmly let them know that I must be fully credited for the day, pro rata.
They always have beef with this and tell me that “normally they don’t do X or Y unless A or B”. I tell them that I fully understand their position, but my position is this:
“When I hang up this phone call it will either be because you have credited me for the day that my service failed and I had to do your company’s job debugging it, or because I have terminated my service. The choice is yours but those are the only options.”
Utilities like water, gas, and electricity are monopolized by the state: torn away from the market's invisible hand.
Internet providers use government regulations, not available market forces, to keep out competitors.
High initial investment cost have totally no role to play at that. Or landlords allowing only a single ISP [0]... that's just part of the market... you can always move, after all. But no, dysfunctional markets must be because of government regulation, since markets are so great that there are no other form of market failures.
Sorry, but equating regulatory capture with "government regulations" kind of triggers me. Companies obviously will use everything possible to their advantage. Including dysfunctional governments. At that point, fixing your gov might be the more important issue...
[0] https://www.eff.org/deeplinks/2019/06/fcc-siding-landlords-a...
I've experienced how local governments handle ISP regulation first-hand. I can say with confidence that it causes many, if not most, issues with ISP monopolies in suburban and rural areas in the US.
> Sorry, but equating regulatory capture with "government regulations" kind of triggers me.
Regulatory capture is composed of government regulations.
> fixing your gov might be the more important issue
Exactly
Google Fiber and “shallow trenching”. https://arstechnica.com/information-technology/2019/02/googl...
It’s also not exactly unlike Google to abandon projects for the new ooh shiny.
Take Thames water, busy playing with offshore finance plays, massively increasing profit and exec pay whilst reducing on all performance measures. Worst nationally for leaks, rate of fixing leaks, managing supply, it goes on.
I can get my electricity from any of the companies in the UK, same for gas, without any restriction. I can choose on price or service, regardless of where I live. Yet service standards have declined, prices have risen far in excess of inflation, and buffer overhead of generation, production and storage has declined. The national grid is more fragile than it was as a result. That's despite efforts of the grid to modernise, and provide a smart grid for renewables. It's required additional regulation to bring back a little headroom on the grid, and inadequate regulation to prevent extreme profit-seeking. The projected plans for additional pumped storage and hydro and tidal schemes have been shelved. For decades. Electric has indulged in the same banking roulette with currency plays seeking profit in preference to producing electricity.
So what part of the market is missing? None. What advantages has the market brought? For execs and shareholders, free money! For customers and the climate? More costs, poorer service.
The biggest winners? The US corporations and hedge funds who fell like vultures on the privatised companies. Oh, and the French state - their power is still significantly state owned, I think 51%. They've been able to save their tax payers money by joining in the profiteering from UK generation - one of the big 6 UK suppliers is EDF: Électricité de France.
A lot of that is regulatory capture, but the other huge factor is administrative costs. Even if I can do a great job and do everything safely with no danger to anyone -- suppose I'm an electrical engineer -- then I'm still not actually allowed to do it because the rules require an electrician.
We could have simple rules -- don't electrocute people, don't start a fire -- but sometimes it will happen despite our best efforts. Then a bureaucracy doing the work will want to defer blame. A set of regulations allow that. If there is a fire but they followed the regulations, well, they followed the regulations. Not their fault anymore, even though it ought to be. But then every time something bad happens, you get another rule (even if there are five other, possibly better, ways to solve the same problem), until the rules are so complex that only a large bureaucratic entity can follow them. Having destroyed competition, we can now blame the market for the resulting badness.
As for the other, it pays to remind ourselves why we have some of those rules. After years of assorted homes and offices, seeing the horrific electrical or plumbing ideas people have had, most of them are there for a purpose. "Don't electrocute people" isn't nearly enough to get a dim bulb technician to know the right wiring or grounding rating for a particular use, or correct routing, or to prevent corners being cut when the company employing pays them minimum wage or on piecework. Best efforts are regularly compromised as a matter of policy when profit is the key driver. It's an area with clear need for strong regulation, otherwise people die.
As someone who rewired my first house, even the onerous regulation wasn't too bad - do the work, stop at the 80 amp fuse, and get a suitably qualified electrician to check and sign it off before hook up. I forget the costs now, but perhaps pay £200 for the safety check and hookup, but saved £2,000+ for having someone rewire.
The rules are simple. They have to be in order for the semi-interested teen to be adequately taught. No small business or self employed guy need be ruled out. I have a friend who, for developing his business, did a few of these courses a few years back - to get the necessary papers to add additional services. His recollection: Extreme boredom because mostly they try to teach common sense - something vanishingly rare - as a college course, pitched for those who had difficulty with shoelaces.
Sadly some of that is the price to be paid for not killing people with shite wiring or gas plumbing. Deregulation or simplification has a death toll - which is why the rules got writ in the first place. I vote to keep - even if the rules are imperfect as they are 99% common sense. I've seen (and paid to repair or replace) what people do to houses and offices, left to their own devices, more than enough times than to encourage more.
I agree. Isn't this also what we see with e.g. Boeing 737 Max? Hollowing out the oversight and regulations in favor of the bottom line.
Yeah, that sounds amazing. Do you think there should be zero alternative firms?
> Also, without a government granted monopoly, private corporations would only compete in the most affluent areas.
That's a ridiculous assertion and doesn't apply to any other good. There may be more options for the affluent, but that's not the same thing.
> They wouldn’t offer services at an affordable rate if at all to less dense areas.
And why should they? People should be living efficiently in cities anyways where they're more productive and have less carbon footprint.
Now imagine a picture of a city with 10 sets of power lines, gas lines, and water lines. Each having to ask for right away to dig up streets and right of way...
That's a ridiculous assertion and doesn't apply to any other good. There may be more options for the affluent, but that's not the same thing.
It’s not an “assertion” it already happens with internet and cable. No one is going out of their way to offer gigabit internet to rural America.
Before, the government forced utility companies to offer service everywhere for phone lines, electricity, and to a lesser extent water.
And why should they? People should be living efficiently in cities anyways where they're more productive and have less carbon footprint.
Right, who needs silly stuff like farms....
Personally, that sounds like a better option than living in a city.
It’s a highly disingenuous argument to say that we’d be better off with a fully private water market.
Is it not possible that this mechanism by which the most popular product is the most attractive one (to prospective employees and employers in our example; in another example it might be people wanting to make phone calls) -- thereby making that product even more popular -- could create what grandparent referred to as a "natural monopoly" even in a completely unregulated market?
You might reply that Microsoft could not have achieved its monopoly without the enforcement of copyright laws by governments. Well, consider an alternative reality in which there is no copyright law, but Windows is distributed only with new PCs and runs inside a cryptographically-secure enclave. In other words, there are purely technical ways to achieve the same business goal that was in actuality achieved by copyright law.
This is apocryphal and not what happened.
At the time that Microsoft invested $150M in Apple, Apple had $4 billion in the bank through loans. Also, Apple turned around and in that same quarter, paid $100 million to buy out Power Computing’s Mac license. Apple also continued to lose money for the next two or three years. The net $50 million wouldn’t have made a difference.
You must realize that you're describing a free product, right? The way people organize around free things is totally different to something they pay for.
People are incentivized to not pay for bad service when better options exist. And the worse the service or the higher the price, the higher the incentive. Entrepreneurs are incentivized to enter a market under those conditions. The more opportunity they see, the more likely they are to enter the market.
The only way to prevent competition is to provide such good service that there's no room for competition (which I can't see a problem with), or to raise the barrier to entry with state policies.
> You might reply that Microsoft could not have achieved its monopoly without the enforcement of copyright laws by governments. Well, consider an alternative reality in which there is no copyright law, but Windows is distributed only with new PCs and runs inside a cryptographically-secure enclave.
I don't think what you're describing would stop anything, but it sure would make using a computer more onerous and likely push away a lot of customers.
> In other words, there are purely technical ways to achieve the same business goal that was in actuality achieved by copyright law.
There just aren't the same tools available to firms when software can be freely modified and redistributed.
Colloquially, a free market refers to one in which a minimal amount of government intervention occurs. The less state intervention, the more free the market.
Whenever you define freedom as "what you get when you do X" you have set yourself up for Orwellian denial of reality.
I think a good way to define freedom is "the condition of having a reasonably large number of good choices". The better and more diverse the choices, the more freedom.
Without regulation and strong intervention against problematic companies cartels, profiteering, monopoly and all the other problems of unconstrained capitalism tend to result. Standards will fall, prices will rise, deals will be done on golf courses and in (formerly) smoke filled bars against the interests of the customers.
The best markets are ones that have a clear market, and are kept free and ethical by strong and appropriate oversight (government). Needless to say there are many markets that are not appropriate uses of the market, and oversight does not work too well with a revolving door between commerce and regulator, smoothed by filthy lucre.
It puts 100% of the burden on the customer to save the company time and it seems every company does it.
I remember spending close to 5 hours 1 day trying to get health insurance where it was just a combination of automated phone options, waiting on hold, being redirected, waiting again, and in the end within 15 seconds of finally getting to a human I was disconnected (I was 100% calm too, they were just asking for my details). And then after thinking "fuck this shit, I'm never buying insurance again" I got the luxury of having to pay over $5,000 in fines for not having health insurance for 2017-2018's tax year.
I don't understand why society puts up with this stuff and unfortunately 1 person can't make a difference.
Worst offender who does this? US Healthcare
Small claim court usually has minor fees to file a case. Most examples I’ve heard had the company settling before it even went to trial.
I mean, you actually got some director on the phone and he listened to you? Only in the 90s... :-)
All the things he initially asked Barclays to do were refused not because they didn't want to do that, but because Barclays can't do that. They can't return the money without a court order (in these particular circumstances the payment was "executed correctly" according to the legal criteria, because the payment was intended to be sent to that account number and was credited to the matchign account number, so any uf the more common justifications of error-fixing can't apply. But the payment laws pretty much implicitly assume that the account numbers are unique, and they weren't in this case), so if the recipient disagrees, then either it goes to court or the money stays there. Furthermore, revealing the account holder's identity would be a crime under banking secrecy laws - again, a court order was needed for that, it's not something that Barclays is allowed to do at their discretion.
What does seem ugly is the obscene legal costs - it should not take 12000 and 34000 pounds to submit a simple claim to the court that (as far as I understand) was not even contested.
It might be important to you that the money goes to Jim, but from the bank's perspective they executed the instructions correctly.
I don't see how the situation would be relevantly different if Teich had mistakenly provided the wrong account number and the correct sort code.
> there really aren't good solutions if the (unintended) recipient disputes the reversal and claims that that's money intended for them.
I also don't see why this is a question we ask the recipient. Wouldn't it make more sense to ask the payor?
Because at that moment that's the recipients money as far as the bank is concerned - it might have been a payment for some valuable item and the payment order used as proof of payment, it might have been a gift or anything, and the beneficiary is legally protected from the payer changing their mind after the fact, the bank isn't allowed to take their money without the beneficiary's consent just because the payer wants it. There are specific legal exemptions that may apply for cases where the payer didn't actually order that payment (e.g. some types of fraud, or technical faults such as a single order getting executed twice), but they don't apply here, because they did order that payment to that account, so it pushes this situation into the same box as all the other (quite frequent) issues of the payer changing their mind after the fact and wanting the money back.
If there's a dispute and the payer claims that the beneficiary shouldn't have that money and they owe it back - well, the banks don't get involved in disputes about who owes whom what, they can only execute payments when ordered by the owner of the money or a court order resolving that dispute. It's just as with a cash payment, if someone has gotten your pile of cash because there's been a misunderstanding, or mistake, or a change of mind, or even actual fraud - you can't simply take the cash away from them if they disagree or dispute the issue, they'll keep the cash until the dispute is resolved, or possibly the police will seize/freeze that cash following due legal process.
There are very many cases where there might be a dispute between a payer and the beneficiary, someone demanding their money back for all kinds of reasons - those cases far outnumber situations like this one. We have a process for resolving disputes about money, and that involves civil claims in court. After a correctly executed payment is completed (and a payment credited exactly as the payer ordered, even if they wanted to order differently or changed their mind) it can be reversed only if the beneficiary agrees or by a court order taking the money from the beneficiary and returning it to the payer, as in this case, that's the law.
> Teich had given his correct name, address and Barclays account number in Cambridge to his solicitor – but the wrong sort code.
> At the moment, anyone wanting to transfer money is asked for the recipient’s account name, account number and sort code. However, it’s typically the case that the bank does not check if the account name is correct.
> The mistaken transfer – called “misapplied funds” in banking parlance – could not have occurred if UK banks matched up sort codes and account numbers with the account holder’s name. But they do not. A recipient’s name could be given as Mickey Mouse and the bank would still process the payment, using the sort code and account number alone.
Actually, pretty much all relevant law for this thing is on this single page - http://www.legislation.gov.uk/uksi/2017/752/regulation/90/ma... (with some additional info at http://www.legislation.gov.uk/uksi/2017/752/regulation/83/ma... stating that the payer can't simply revoke the payment)
The other account was the unique account matching the account number + sort code (this combination is presumably what Barclays deems the 'unique account number') - so that's "executed correctly" according to "Where a payment order is executed in accordance with the unique identifier, the payment order is deemed to have been correctly executed by each payment service provider involved in executing the payment order with respect to the payee specified by the unique identifier."
The payer had also specified the name and address, but the law explicitly states that the bank is not liable for mismatches of the name or address, it's only required to execute it according to the account number. "(5) Where the payment service user provides information additional to that specified in regulation 43(2)(a) (information required prior to the conclusion of a single payment service contract) or paragraph 2(b) of Schedule 4 (prior general information for framework contracts), the payment service provider is liable only for the execution of payment transactions in accordance with the unique identifier provided by the payment service user. " is quite a mouthful but it essentially says that even if you provided extra information, that information can be ignored.
However, the article implies that Barclays did not fulfil their requirements of "(3) The payee’s payment service provider must co-operate with the payer’s payment service provider in its efforts to recover the funds, in particular by providing to the payer’s payment service provider all relevant information for the collection of funds." which does seem to require them provide sufficient information to sue the mistaken recipient to return the money.
They charge extra because they know they don't get paid if they loose. Also, there was a good chance they wouldnt get paid if the recipient of the money took it all overseas, or if the 74 year old died before the issue was resolved.
Source: I'm a plaintiff in a lawsuit that is very likely to win damages, and get contacted all the time asking if I need funding for the case.
I have never liked the business, frankly lawyers are scummy and will (if given enough time) screw you eventually, but it exists (btw, Burford Capital are known for taking liberties with their reporting to investors...which kind of proves the point).
If your business can immediately do the right thing when contacted by a newspaper in a no-brainer case like this, but not a second sooner, then you’ve got problems. That said why in the world did the individual who forced this to court not get slapped with covering his court fees?
Finally the building manager got a local TV station to do a news piece on the saga, and two days later it was fixed.
Maybe Barclays do not include such a term?
--
[1] http://www.legislation.gov.uk/ukpga/1968/60/crossheading/def...
Classic quote: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.”
The cost of risk externalized by one person speeding is about the same, modulo driver skill and location and whatnot; it is not very sensitive to rich the driver is. If the goal of the law is to impose enough additional risk of a fine to compensate for the externalized risk, then it makes perfect sense that millionaires don't need to obey speed limits--as long as they can pay up.
If the law is intended as a deterrent, this obviously isn't working.
And this is sensible. How do you compensate a family for a dead body? You can't. So the purpose of the law should be to prevent the need for that compensation in the first place.
Bean counters will manage it though, if asked.
Treating people differently through some arbitrary definition of difference is wrong. Either we're all equal in front of the law or some animals are more equal than others. And the kind of justice you're peddling is what has set countries across the world on fire recently; the uneven application of the law.
[Edit] I don't think I was clear. Everywhere we see special cutouts in the law, all that happens is that the more capable less scrupulous people capture those cutouts. The best we can hope to do is to treat everyone exactly the same in front of the law.
How would it not be treating "everyone exactly the same in front of the law" to just say that fines are assessed as a percentage of income and/or net worth?
All of that said, personally I wouldn't extend this all the way back to the original argument about theft though, stealing $1000 is the same regardless who you steal it from, at least as far as the law should be concerned. I could see a moral difference, but the law often does not (and can not) make moral distinctions. It could however make reasonable distinctions in the application of the punitive aspects, as it sometimes does in terms of jail sentencing.
"Equal in front of the law" actually means that financial penalties should be progressive in the same way taxes should be. Some countries actually do this, and they're not on fire.
Do you believe that will have the same deterrent effect across society? I sure don't.
I suspect you don't believe that, so when you say "the government treating someone differently (in anyway) due to who they are is wrong" what do you mean?
That doesn’t necessarily justify a theft but $1000 isn’t identical utility to all.
If enough people steal from "the bank" under your theory, the old blind lady winds up eating cat food and not being able to pay her rent because the bank is no longer profitable.
That doesn't sound quite as "defensible", now, does it?
Note that things like banks and insurance companies (another favorite whipping boy) do tend to have their stocks owned by things like retirement funds, precisely because they are considered low-risk investments with a safe (albeit small) yield.
It's simple to me. a single person stealing from a bank incurs a lot less suffering then a single person stealing from a welfare recipient. The damage done is simply not even comparable.
Yes, you absolutely are.
> it's proven that the government will swoop in and save the bank as happened
And you're also apparently seeing "the government" as a faceless entity with an unlimited amount of cash.
When the government "swoops in", it's at the expense of every single taxpayer.
I'm boggled that people are incapable of understanding this, or are in such denial about it that they feel the need to mod me down rather than debating the point.
This is the unfortunate state of business. You’re fucked unless you can rake a company over the coals in a public.
https://www.xe.com/ibancalculator/sample/?ibancountry=united...
It is often possible to perform foreign transfers using destination IBANs, but they seem to prefer (or require) the traditional approach for UK Sterling transfers.
I can understand why they retain the old system, but it would be useful if they in addition offered the ability to specify the target via IBAN for domestic transfers, since they already do for transfers to the rest of the EU.
Even when doing a SWIFT transfer, the IBAN (if one has it) is useful.
Japan has the same system of sort/branch codes and account number, but when I enter those here the recipient name is automatically filled out, making incorrect transfers pretty much impossible (unless, I guess, your mis-entered transfer to Mr. Sato is transferred to a different Mr. Sato instead)
A part of the Eurozone transition was that all local systems were replaced by SEPA SCT/SDD, which are inherently IBAN based. But SCT/SDD only apply to Euro transfers, and so in non-eurozone locales the existing infrastructure and nomenclature is retained
> Japan has the same system of sort/branch codes and account number, but when I enter those here the recipient name is automatically filled out, making incorrect transfers pretty much impossible (unless, I guess, your mis-entered transfer to Mr. Sato is transferred to a different Mr. Sato instead)
There is a Confirmation of Payee system coming soon in the UK (which most of the large banks have, unfortunately, delayed). It works slightly differently: it will compare the name, but not _generally_ tell you the name of the recipient because that comes with privacy concerns
These could be compatible though. e.g. in Poland numbers used for local bank transfers are just IBANs with country code trimmed from the front.
1234567890-1234-checksum(1234567890-1234).substring(0, 6)
where 1234567890 is the account number, 1234 is the short code, and then 6 characters are typed in at the end are a checksum.
The short code is unique. So if you type in the correct checksum but not the correct short-code the fully-qualified unique identifier does not pass the validation step. Like-wise, if you type in the correct short-code but not the checksum then the unique identifier also does not pass the validation step. Thus, the user is protected against typing in an incorrect short code.
In most cases the sort code is included in the checksum
https://www.vocalink.com/media/3513/vocalink-validating-acco...
The bank account numbers have had check digits since 1967!
If a crypto (or other digital) currency has reversible transactions ("Undo this transaction and all the after effects"), that would be cool. So if I spent that 10K on a new Mac, after the Undo I'd have the Mac and a huge unpaid bill from the Apple Store...
Hard for me to not be a pessimist when thinking about the future because it always leads me to believe there will be a social point system like that episode on TV series Black Mirror.
> A high-profile Chinese businessman is on the brink of becoming a social outcast and being banned from his lavish spending habits by the courts if he doesn't pay back $21.5 million debt, even though he is the son a well-known real estate tycoon.
> Wang Sicong, the son of the billionaire owner of AMC Theaters, Wang Jianlin, was last week listed in the national database of the Supreme Court of China of debtors and defaulters with outstanding debt. A failure to pay within the given time will see him join the ranks of “discredited” people.
https://www.nbcnews.com/news/world/billionaire-s-son-latest-...
Because asking people to be nice won't scale as well as getting a bank to behave.
On the up side, I the end it all worked out. Had this been some internet account screw up recourse would have been harder.
2. I think the primary issue is down to cuts to the judicial system. Courts are overburdened with cases and a change in the law would do nothing to address the root cause of why it took two years.
"That money was such a godsend for me and my family. I didn't want to touch it at first, but my son lost 5000 pounds betting on horses, and the bookies were threatening to break his legs. My daughter was failing her classes while working two jobs, with the money she could stop working and focus on her studies. She's always dreamed of becoming a reporter", etc.
Jane received this money through no fault of her own, and now that she's had to give it back, her life has been thrown into turmoil once more. And that's not all, she is now facing prison for a non-violent crime she had no idea she was committing.
Etc. etc., the article basically writes itself.
While many countries and specific banks had or have alternate checksum systems that pre-date IBAN, not all of them actually cover the whole account number (eg. may only cover the account number itself, not the sort code / branch code / bank code / whatever else). These are also falling out of use at an unreported rate so it is often difficult to determine whether or not they are now significant. Often a bank just starts ignoring its previous rules without telling anyone, leading to popular confusion.
IBAN is a pretty well designed system, possibly excepting the mistranscription issues which it probably considered out of scope but could have seriously helped to avoid with recommendations / best practices. The point of all this is that you shouldn't reinvent the wheel... and that goes for digital banking and digital currency systems as well as any other system with identifiers that may need to be manually analyzed, compared, reported or transcribed.
[0] https://github.com/globalcitizen/php-iban [1] https://raw.githubusercontent.com/globalcitizen/php-iban/mas...
Note that it is still possible to check an account number without an IBAN: https://github.com/AntoineAugusti/moduluschecking
The issue here was not the account number being wrong, but rather the combination of sort code and account number being wrong - for which there is not necessarily a checksum digit covering the pair.
I have some accounts where the sort code and account are not directly embedded in the IBAN. So for those possibly there is a mapping table one could refer to.
UK banking system is 6 digit sort code and like 8 digit acc.
The accounts are IBAN compatible though & it's derived from the above - but I can send money to a friend UK-UK without any IBAN stuff.
I fixed one mistake on a bill payment made in the afternoon later in the evening, thought "thank $diety," and learned an important lesson. Certainly large transactions should receive a modicum of scrutiny and delay to finalize.
Also, it's easy to criticize the bank, but what should one do when a transaction is disputed by the two parties? How does the bank know which is lying or mistaken, for sure? Sounds like the perfect time for a court to get involved—that's what they do.
I don't think that's the case but seeing it from the banks point of view such scenarios could exist.
I'm in the US.
For whatever reason, and to this day I swear I was not at fault in giving correct or incorrect numbers across the board, both "roth" and "traditional" monies got dumped into the same receiving "traditional" 401k account. Bad times.
Fortunately, the person I spoke to over the phone understood the situation ... excused themselves to their manager ... called me back with a solution that included a specialized tax form to sort it all out.
A few days later somebody else in the receiving company called me up all "what is going on with this FUBAR?!?". I let them out-wind themselves, then calmly explained the situation as it had been to me, and then all was well for the second time.
Tax time came around and thankfully all became well for the third time around.
Since I am paranoid against the US IRS, I keep paper records for 9 years and on top of that digital-copy records going as far back as I ever can.
Still, this is not as bad as OP-posted article, but I got scared just brushing against such an issue.
Wow. So far behind.
"Barclays said it asked the person who received the cash for permission to return the money, but he refused."
There is nothing to refuse. The law in my country would be pretty clear about this. Honestly, just to prevent the guy withdrawing and spending it, it would very likely pay him a visit. But that is me.
The better resolution is to make sure such errors don't happen in the first place.
I feel we need an additional per-account verification hash that works as follows:
1. Enter recipient bank details in online bank screen.
2. You are then shown a verification hash based on the details entered - you confirm it matches the hash provided by the recipient (obviously, make the hash easy to compare visually).
3. You enter the amount to send and hit send.
This way you can at least ensure the money is going to the correct place. Right now, if you happen to send the money to an unintended bank account, you may never know until the intended recipient tells you.
We use IBANs (despite we are not in Euro zone and most international transfers are in USD), so errors in one digit will be immediately identified and request will get rejected.
Also, if transaction is within the same bank, we always see full name, first name and last name initial, or first name initial and last name (depends on bank and transfer method) before final confirmation.
The accounts used to be a single account at one financial institution. It got bought by a larger financial institution about ten years after they were married (this was their first joint account as a couple). Fifteen years after that, the bank split apart into three regional banks. The routing number changed with each corporate change but the account number persisted. In the last split, some customers who had property mortgages were “retained” by the divesting bank and “acquired” by the divested one.
Thus, two identical account numbers, different routing numbers.
I dunno, this sounds fake.
Financial institutions make mistakes all the time, and if the scenario here really did happen, what do you spend £46,000 on? Lawyers are expensive, but they don't charge that much to send a nasty letter. That's like months of billable hours.
Why would someone assume the Guardian doesn't make up stories like these? Are they more reliable than the Sun?
Court claims are expensive. This ultimately would've been heard in the High Court and the claimant would want decent counsel to represent him as well as a team of solicitors and other legal professionals to research and handle the correspondence — that's the bulk of the fees.
Then there's the cost of the application itself. The fee for starting a case is 5% of the amount for claims worth between £10,000 and £200,000.
In this case, that's almost £10,000 gone immediately on the court fee. For one case. There's also a court fee for the initial hearing and the return hearing for the freezing order.
Not sure how £12k was spent on the first case—article doesn't mention which court and suggests the High Court was only involved in the second case, but I suspect that isn't true.
I don't believe it. If this was really the way the courts over there worked, then nobody would make disparaging comments about the American legal system.
I apologise for not making it clear — that fee is specifically for filing a claim in the High Court. Inferior courts will charge less.
Given the specificity here, have to sue Barclays to find out whom did the money go to. Barclays cannot take customer money without a court order or disclose customer identity. Then sue the person to get the money back.
I think the lesson here is that person who tried to keep the money is a dickhead. Moreover, it's really lucky that he didn't burn it all and was insolvent.
I guess it gets blurry when looking at it after the fact and he's been formally refusing to return it for a year.
"Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner."
In this case, the person innocently came by the money as a result of a mistaken bank transfer. They then proceeded to withdraw it from their account and presumably spend it: thus keeping it and/or dealing with it as the owner would—meaning they appropriated it accordingly.
All other elements seem to be made out here too: A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and “thief” and “steal” shall be construed accordingly.
The conclusion hints that it was returned, without making it clear. In the absence of better information, I would assume that it wasn't used or withdrawn, it couldn't have been returned if it were.
Doesn't it say that he "bagan to withdraw the cash" though?
Dishonestly retaining a wrongful credit.
(1)A person is guilty of an offence if—
(a)a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest;
(b)he knows or believes that the credit is wrongful; and
(c)he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled
Did he dishonestly fail to take reasonable steps? From the article, it seems that the bank asked him if they could take the money back. It would seem to me to be a reasonable step for him to say "yes". Did he dishonestly do so? Tricky one; Theft Act 1968 specifies what dishonesty is not, leaving it open to a jury to decide what it is.
Theft Act 1968 says the following cases are NOT dishonesty:
(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or
(b) if he appropriates the property in the belief that he would have the other’s consent if the other knew of the appropriation and the circumstances of it; or
(c) (except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps.
HOWEVER, there is an incomplete definition of "wrongful credit" here that could throw a spanner in the works:
A credit to an account is wrongful to the extent that it derives from—
(a)theft;
(b)blackmail;
(c)fraud (contrary to section 1 of the Fraud Act 2006); or
(d)stolen goods.
One legal interpretation of "to the extent that" is simply "if", in which case this was NOT a wrongful credit to an account, and this entire section of the Theft Act 1968 ceases to apply.
HOWEVER, it's not "if and only if"; could one argue that this was a wrongful credit? Well, it was certainly wrong in that the account that was credited was not the intended account. I suspect a good lawyer could reasonably argue this, but I don't need to go looking for case law; in this case, the court agreed that the money must be returned, which I think is itself case law supporting the idea that the recipient was in the wrong.
Either way, it's still a civil case at the beginning. Have to go to court with the bank to formally request a return and establish the identity of the holder.
By the way I was thinking of another Act that says you have to return stuff sent to you by mistake, can't seem to find it again.
In this case, is it a "wrongful credit"? Arguably, yes — it's theft per S1(1) of the Theft Act 1968 since the recipient intends to keep it and appropriates the rights of the owner in doing so.
The closest Act I can find regarding returning stuff sent to you by mistake is the Consumer Rights Act 2015, specifically S25 which says that if the trader sends you a quantity of goods greater than you were expecting, you may accept them but you must pay for them at the contract price—you cannot keep them for free: http://www.legislation.gov.uk/ukpga/2015/15/section/25
The original Act was the Unsolicited Goods and Services Act 1971 but the section on the right of recipients to keep unsolicited goods has been repealed accordingly.
It's the cause of millions in fraud.
So, learn from this and double, triple, quadruple check what you enter every time. It takes less than a minute and can save you from bigger headaches. Just like wearing safety goggles.
Except that you're not responsible. Peter Teich got his money restored using only the UK legal system.
The process was:
1. Sue the bank for the other customer's name.
2. Sue the customer who received the payment.
3. Recover from them. This recovery is (surprise!) enforcible by the bank.
If you were responsible for the consequences of sending money to an account you specified incorrectly, none of that would be possible in the first place.
I do think it's a good system, if you want to recover your money, you can go to court. Wish it was cheaper/faster/more straightforward to do that.
Obviously, when a court order compels recovery of the funds, the bank is obliged to comply.
People do this all the time. Mum mum did it recently paying for a used car.
Also usually the payment details are saved after the first payment so the risk of making a mistake with the second payment is low. You would reuse the saved payee.
>Also usually the payment details are saved after the first payment so the risk of making a mistake with the second payment is low. You would reuse the saved payee.
Exactly. A twist is my bank wipes the saved payees after a few months or so.
The verification would only happen prior to the first transfer of value, with subsequent transfers using the verified information.
Seems like if the banks cared they could add a very similar process for adding personal transfers, and mostly automate it for their customers. Except it's customer money being lost so the impetus is not there.
If the Solicitor had instead posted a cheque to the heir, then the problem likely would not have occurred, and if it had would have been reversed a lot sooner.
The solicitor should use a more secure service for sending money. Something that is harder to make a mistake and that provides better guarantees. For example, a cheque, a money order, a professional money transfer service, hell, even a Venmo transfer would be better, as you can send a QR code and that's harder to mess up.
Having worked in a post office and having heard hundreds of stories about dealing with corporations, I can confidently say that anything like this should be done by registered mail with delivery confirmation. Digital solutions simply aren't up to scratch yet. With any "interaction," there are so many things that could go wrong: information mistakes, sorting mistakes, lack of evidence when figuring out a problem, potential for identity theft, potential for malicious actors to gain, potential for things to get lost, lack of accountability, lack of insurance, etc