BACS payment error/mistake - advice needed

[S a m]

Hi,

Looking for some advice on where to go/who to speak to on this one.

Last month we paid one of our staff in to their "old" bank account rather than their "new" one. The problem is their old account has an overdraft and is locked, they have an agreed payment plan with the bank to clear it.

The payment we made has gone straight against the overdraft, so our employee can't withdraw it to give it back or transfer it to their normal account.

Naturally, we immediately paid our employee again via their new account without hesitation, so they are fine financially, as we usually pay wages a little early it wasn't a problem.

The problem is that their bank (Natwest) has told them there is nothing they can do to get the money out. Our bank (Barclays) also says there is nothing they can do, and its down to our employee. Natwest are saying Barclays have to contact them about it to do a "BACS recall", but Barclays say they can't do anything as its not fraudulent and is beyond the 3 days where the money is "in the system". The error was spotted on the 4th day.

At the rate our employee was paying Natwest, it will take over 12 months for him to pay us back instead (Natwest have agreed to stop taking the agreed amount for the time being).

What do we do from here? The money isn't overly critical, but we would like it back, and preferably sooner rather than later.

I'm of the opinion that Natwest should see the error and agree to refund it, going back to their original agreement with our employee. Problem is no one at branch level seems to have any authority to do this, and we, and our employee are getting bounced around.

Thanks,
Sam

[JustinP1]

S a m said:

... but Barclays say they can't do anything as its not fraudulent and is beyond the 3 days where the money is "in the system". The error was spotted on the 4th day.

Surely that is not quite right. Lets say you put £100,000 by mistake into the wrong account. Are they saying that the would leave you on your own to try and sort this out with someone rather than organise what *can* be done?

[tigger1]

Can you arrange with your employee to "reclaim" it from their payments over the next few months? Not ideal, but at least it's sorted easily that way. They'll have a little less in their pocket each month, but they've paid a chunk of their overdraft using your mistaken payment already.

Who's fault was it you paid the wrong account?

[jamesuk28]

http://www.financial-ombudsman.org.uk/

[S a m]

JustinP1 said:

S a m said:

... but Barclays say they can't do anything as its not fraudulent and is beyond the 3 days where the money is "in the system". The error was spotted on the 4th day.

Surely that is not quite right. Lets say you put £100,000 by mistake into the wrong account. Are they saying that the would leave you on your own to try and sort this out with someone rather than organise what *can* be done?

Pretty much, yes.

From what I gather, if it was a fraud issue then they could do something. As its not, all they can do is write to the bank, to ask the bank to authorise the refund with the recipient. Our employee is more than happy to return the money, but can't because its locked in his account and can't be withdrawn.

[S a m]

tigger1 said:

Can you arrange with your employee to "reclaim" it from their payments over the next few months? Not ideal, but at least it's sorted easily that way. They'll have a little less in their pocket each month, but they've paid a chunk of their overdraft using your mistaken payment already.

Who's fault was it you paid the wrong account?

We have, but as per above it will take around a year to get it back at the rate the employee was paying it back, and can afford to pay it back.

It was our fault - we had the right details, but the old details were still in the payee list, under the same name. The wrong (old) one was selected by mistake.

[RadoVR6]

S a m said:

Hi,

Looking for some advice on where to go/who to speak to on this one.

Last month we paid one of our staff in to their "old" bank account rather than their "new" one. The problem is their old account has an overdraft and is locked, they have an agreed payment plan with the bank to clear it.

The payment we made has gone straight against the overdraft, so our employee can't withdraw it to give it back or transfer it to their normal account.

Naturally, we immediately paid our employee again via their new account without hesitation, so they are fine financially, as we usually pay wages a little early it wasn't a problem.

The problem is that their bank (Natwest) has told them there is nothing they can do to get the money out. Our bank (Barclays) also says there is nothing they can do, and its down to our employee. Natwest are saying Barclays have to contact them about it to do a "BACS recall", but Barclays say they can't do anything as its not fraudulent and is beyond the 3 days where the money is "in the system". The error was spotted on the 4th day.

At the rate our employee was paying Natwest, it will take over 12 months for him to pay us back instead (Natwest have agreed to stop taking the agreed amount for the time being).

What do we do from here? The money isn't overly critical, but we would like it back, and preferably sooner rather than later.

I'm of the opinion that Natwest should see the error and agree to refund it, going back to their original agreement with our employee. Problem is no one at branch level seems to have any authority to do this, and we, and our employee are getting bounced around.

Thanks,
Sam

Do you not have a business manager at barclays? If so go to them rather than the staff in the branch.

If you are using business master to do the payments give them a call and they will recall it. Your employees bank should contact your employee for permission to return it to you. Which they obviously will.

This has happened in our company before when a few digits in an account number were transposed. Took a few days to sort.

[Fatboy]

S a m said:

... but Barclays say they can't do anything as its not fraudulent and is beyond the 3 days where the money is "in the system". The error was spotted on the 4th day.

There was a thread on here a couple of years back where Barclays had accidentally paid a stload of money into someones account - IIRC they just sent a letter to the person saying they would take it out and then took it out without any further fuss. So your branch are talking st.

[S a m]

I'm going to go back to our business manager again (who's usually very good) - will let you know what happens.

[john_p]

Best word it as "the money was transferred into the wrong account, we need it back urgently" and leave it unclear as to the employee's situation, as it may cloud the matter slightly.

[Chrisgr31]

Fatboy said:

There was a thread on here a couple of years back where Barclays had accidentally paid a stload of money into someones account - IIRC they just sent a letter to the person saying they would take it out and then took it out without any further fuss. So your branch are talking st.

The difference in the case quoted it is that it is the banks error, and they have merely reversed the mistake.

In the case of the OP the employer made the error and have sent the money to a valid account.

We had a case here where an employer managed to give the accounts department the wrong account number. Come payday her salary went in to someone elses account, and never came back.

[trunnie]

You intended to pay the person. You did so. Due to a mistake on your part you sent into an account in their name that they still used but had come to an arrangement with the Bank with. Why should either Bank repay you for correctly applying the funds in accordance with your instructions? For me it's an issue between you and your member of staff. There doesn't appear (on what you've said) to be an error on the part of either Bank.