BACS - Bank Account Mistakes


J

Jane Tweedynn

Just a couple of quick questions relating to companies using the bacs
payments system.

If payment has been made where the bank account and sort code are correct
but the account name is incorrect. Would this payment still be processed?

If payment has been made where the bank account and sort code are incorrect
(suppose the mistake is one of someone else's bank details (ie bank acc and
sort code match)) however the account name is correct. Would this payment
be processed to the wrong account? and if yes what avenues are available to
reclaim the monies?

TIA
 
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J

john boyle

Jane said:
Just a couple of quick questions relating to companies using the bacs
payments system.

If payment has been made where the bank account and sort code are correct
but the account name is incorrect. Would this payment still be processed?
Generally, yes. It would be credited to the sort code & account number
quoted.
If payment has been made where the bank account and sort code are incorrect
(suppose the mistake is one of someone else's bank details (ie bank acc and
sort code match)) however the account name is correct. Would this payment
be processed to the wrong account?
Yes, it would be credited to the sort code & account number quoted.
Whilst the receiving bank generally get a printout of the days BACS
transactions which includes the receiving account name as entered by the
remitter. Nobody checks this at the receiving bank end.

The bacs process checks the validity of the account number but it only
asks the question 'is this account number a member of the set of all
possible account numbers for the quoted sorting code?', not 'is this
fred's account number?' 'or 'has this account number been allocated
yet?'.

and if yes what avenues are available to
reclaim the monies?
You claim the dosh back off whoever made the mistake, which is likely
not to be the bank as most errors of this sort are made by the remitter,
as it is they who prepare the data and send it to the bank to process.
Somebody could have given the remitter the wrong details of course.
 
J

Jonathan Bryce

Jane said:
If payment has been made where the bank account and sort code are correct
but the account name is incorrect. Would this payment still be processed?
I don't think the account name forms part of the instruction, so yes.
 
A

Anthony R. Gold

Jane said:
Just a couple of quick questions relating to companies using the bacs
payments system.
[snip]
If payment has been made where the bank account and sort code are incorrect
(suppose the mistake is one of someone else's bank details (ie bank acc and
sort code match)) however the account name is correct. Would this payment
be processed to the wrong account?
Yes
[snip]
and if yes what avenues are available to
reclaim the monies?
You claim the dosh back off whoever made the mistake, which is likely
not to be the bank as most errors of this sort are made by the remitter,
as it is they who prepare the data and send it to the bank to process.
So the remitter must ask for the money back from the remitter? Good one!

Tony
 
J

john boyle

Anthony R. Gold said:
So the remitter must ask for the money back from the remitter? Good one!
From which angle are you looking at this? The remitter or the recipient?
 
J

Jane Tweedynn

If payment has been made where the bank account and sort code are
Yes, it would be credited to the sort code & account number quoted. Whilst
the receiving bank generally get a printout of the days BACS transactions
which includes the receiving account name as entered by the remitter.
Nobody checks this at the receiving bank end.

The bacs process checks the validity of the account number but it only
asks the question 'is this account number a member of the set of all
possible account numbers for the quoted sorting code?', not 'is this
fred's account number?' 'or 'has this account number been allocated yet?'.



You claim the dosh back off whoever made the mistake, which is likely not
to be the bank as most errors of this sort are made by the remitter, as it
is they who prepare the data and send it to the bank to process. Somebody
could have given the remitter the wrong details of course.
Thanks.

So I have used another person/companies bank and sort code and paid the
money to them incorrectly.

It is my mistake.

Does this mean then that I have lost this money (given that the account
where the money went is valid and this person/company refuses to repay). Is
the answer different whether the account name is correct?
 
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A

Anthony R. Gold

So I have used another person/companies bank and sort code and paid the
money to them incorrectly.

It is my mistake.

Does this mean then that I have lost this money (given that the account
where the money went is valid and this person/company refuses to repay).
Unless the recipient can defend their action by claiming that you really
did own the money, then their refusal amounts to theft. If it is a small
amount and the recipient is worthless, then give up. But if the amount is
material and if recipient is substantial, then threaten to bring a claim
in County Court and after a decent period (say three weeks) do it. And
you can and should gross up the claim by the costs of brining the action.

Tony
 
A

Anthony R. Gold

From which angle are you looking at this? The remitter or the recipient?
From the angle of someone reading your posting. You said that the person
who wanted the money BACK (so the remitter) should ask for the money back
from the person who made the mistake, which was pretty clearly the poster
and remitter, and as was subsequently confirmed in Jane's second post.

Tony
 
J

john boyle

In message <[email protected]>, Anthony R. Gold


Unless the recipient can defend their action by claiming that you really
did own the money, then their refusal amounts to theft.
(Missing posts now arrived!)

It may 'amount to theft' but it isnt 'theft'. It is a civil matter. Even
so there are defences available based on the concept of 'having changed
their position' and on 'the transaction not being out of the ordinary';
(my quote marks).
If it is a small
amount and the recipient is worthless, then give up. But if the amount is
material and if recipient is substantial, then threaten to bring a claim
in County Court and after a decent period (say three weeks) do it. And
you can and should gross up the claim by the costs of brining the action.
Wholeheartedly agree, except that i would go for judgement even if the
recipient is less than substantial but more than worthless. (At least
theyd get turned down for interest free credit on that new DVD player @
Comet)
 
J

Jane Tweedynn

john boyle said:
Hi Jane

Your post arrived after I responded to ARG's.

I must admit that I initially assumed (incorrectly) you were the
beneficiary (whose dosh had gone elsewhere) rather than the remitter.

If it is your cock up then the responsibility rests with you, but that
doesnt mean you have no recourse.

You should approach the beneficiary and ask for the dosh back. If you dont
know the address of the of the beneficiary then as you will know the bank
& branch of the incorrect account (from the sorting code) then you should
write to the beneficiary 'c/o' the bank branch to whom the dosh was sent
and ask them to forward the correspondence to the account holder.

The recipient has no legal right to the dosh (assuming you didnt owe them
some other dosh) but this is a civil matter, not a criminal one. If they
wont pay up you would have to sue.

As an aside, the banks involved in the transaction have no responsibility
if you used BACS (but see below)


Not if you used BACS, but if you used a hand written Bank Giro Credit then
the situation could be different. (This is one reason why you dont see
those bits of paper on bank counters so often these days)

Hope this helps, if not please ask more.

Thanks to all.

Its not actually happened, we are putting in a system and I was unsure of
the process if this happened.

I'd have thought that the banks would be able to reclaim the monies on our
behalf if the account name did not match the bank acc and sort code whereas
if we had just paid the wrong person/company then we would have to ask for
the money back. I would use the analogy of a cheque sent to the wrong
person (ie the name is in another person) and where we have sent a cheque to
someone by mistake. In the first instance the cheque could not be cashed as
the money has been sent to the wrong person, in the second if the payment
has been cashed we would have to ask for payment returned. Seems account
name means nothing to BACS.
 
A

Anthony R. Gold

Its not actually happened, we are putting in a system and I was unsure of
the process if this happened.
I am so pleased to learn that and sincerely hope it never does happen.

It's actually fairly hard to mess up a BACS payment with a simple typo, as
opposed to sending to the real account information of the wrong person by
mixing them up, because a bank account number includes a check digit and
so just changing or omitting a digit will result in an invalid number.

Tony
 
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