And people wonder why banks ask questions...

[AF62]

https://www.thetimes.co.uk/article/bank ... -06r95nclg or https://archive.fo/yeNeI

Summary - person invests £350k in a development company at 15% interest in 2019, some building works takes place, but the development ceases and the whole thing is wound up in 2021 and the investors lost most of their money. Police are considering whether there has been any crime, but not reached a conclusion. Now the investors want their money refunded from their banks under the 'authorised push payment" (APP) scam rules.

The argument being made that the investors bank owes them the money since the investors had conducted reasonable checks to ensure the company that they were paying was legitimate and the bank let them send the money.

At the moment the APP refund scheme is voluntary, but If the government does replace this with a mandatory reimbursement scheme, then I can foresee banks simply refusing to allow people to transfer large sums of money to people or companies unless the bank is 110% sure it is not going to result in a claim.

Can you imagine the hue and outcry from the person making the claim if the bank had refused to let them transfer their £350k originally, and they would undoubtedly have been moaning that the companies they wanted to send the money to were registered at Companies House and they had provided the bank with a copy of the detailed appraisal report on the scheme drawn up for the senior lender, which invested many millions of pounds in the scheme on the basis of that report, and it was completely unfair and ridiculous the bank wouldn't send *their* money and the bank should do as instructed.

[88V8]

The argument being made that the investors bank owes them the money since the investors had conducted reasonable checks to ensure the company that they were paying was legitimate and the bank let them send the money.

Banks are not their customers' keeper, and should not be obliged to compensate for customer's carelessness, or the maladroitness of happenstance.
My butcher is not responsible if I burn the rissoles....

But as govts like to be nice to the electorate with other people's money, I expect this nonsense will continue, thus making UK bank shares a lousy investment.

Albeit this is perhaps more a topic for CAN....

V8

[Padders72]

I read the above earlier too and was interested. I can't say I blame the customer for trying it on but it seems to me also a case of wanting cake and eating it. So far the bank in question has dug their heels in and it has gone to the Ombudsman. No crime has been proven as yet, businesses do fail for many reasons, not always due to malfeasance or deceit, and without the latter I can't see how the bank can be considered liable.

[Redmires]

The argument being made that the investors bank owes them the money since the investors had conducted reasonable checks to ensure the company that they were paying was legitimate and the bank let them send the money.

Banks are not their customers' keeper, and should not be obliged to compensate for customer's carelessness, or the maladroitness of happenstance.
My butcher is not responsible if I burn the rissoles....

But as govts like to be nice to the electorate with other people's money, I expect this nonsense will continue, thus making UK bank shares a lousy investment.

Albeit this is perhaps more a topic for CAN....

V8

I couldn't agree more. It seems to me that the government are pressing the banks to give compensation for almost everything. It saves them from

a) investing in police resource to investigate fraud
b) clamping down on social media companies and make them responsible for the crime perpetrated on their platforms
c) regulating against the telecom companies who permit number spoofing to assist fraudsters

https://www.ukfinance.org.uk/news-and-i ... 0-cent-app

[Steveam]

Having read the article this seems to be a sophisticated investor hoping to get a risk free 15% per annum - nice work if you can get it!

It seems to me that the investor has NOT taken reasonable precautions as the most obvious precaution is to ask oneself whether the promised return makes sense - it doesn’t.

As mentioned by other people imagine the anger of the investor had his bank delayed the payment and he’d lost the investment opportunity. As the article mentions that the investor had previously done this sort of investment it is quite possible that the investor has done these sorts of transfer on a semi regular basis.

I really don’t think the bank should be liable.

Best wishes, Steve

[Padders72]

I wonder if the recent unrelated APP case won by Barclays which sets a precedent for bank liability puts to bed the claim mentioned above.

[GeoffF100]

It is a real mess. I get hassle moving money to own accounts with banks and other financial institutions. It is pretty clear that banks do not have a way of identifying own accounts. A database of account ownership should do it. If someone applies for an account in my name, I should get a notification and have to confirm that it is me. After that, it should be plain sailing. For debit card transactions, listing the MasterCard and Visa merchant codes for FCA regulated firms on the FCA Register should do it. It all requires cross industry action.

I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds. Perhaps it will become wise to pay tradesmen in cash. That will increase tax evasion, of course (and they may get their accounts blocked on suspicion of money laundering ). I am considering replacing my Marcus account with a Skipton Building Society account, where I have the option of drawing money in cash or perhaps even getting an old fashioned counter cheque.

[XFool]

It is a real mess. I get hassle moving money to own accounts with banks and other financial institutions.
...
I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds.

Strange. I have not encountered this - though I don't do this on a regular basis, to banks and accounts I have not used previously.

Who/what do you mean by "banks"? By certain criteria I haven't had a "bank" account since about 1971 - where "bank" refers to a building on the high street with the word 'BANK' carved into stonework above the entrance.

My current, and long term, "bank" is Nationwide BS.

[didds]

I Perhaps it will become wise to pay tradesmen in cash.

that is assuming tradesmen want / will take cash, especially if they then cant use cash to purchase materials/its not really feasible to do so.

didds

[Lootman]

It is a real mess. I get hassle moving money to own accounts with banks and other financial institutions.
...I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds.

Strange. I have not encountered this - though I don't do this on a regular basis, to banks and accounts I have not used previously.

Who/what do you mean by "banks"? By certain criteria I haven't had a "bank" account since about 1971 - where "bank" refers to a building on the high street with the word 'BANK' carved into stonework above the entrance.

My current, and long term, "bank" is Nationwide BS.

Banks and building societies are pretty much the same these days, just a different ownership model. Nationwide do current accounts and banks do savings accounts and mortgages. I have accounts with both and cannot see much material difference between them.

A bigger distinction is between online/phone only banks and banks that also have a branch network. I prefer the latter since they give me more options.

I Perhaps it will become wise to pay tradesmen in cash.

that is assuming tradesmen want / will take cash, especially if they then cant use cash to purchase materials/its not really feasible to do so.

Historically the contractors I have used like being paid in cash. But recently the one I use the most says he wants to be paid by cheque. I do not mind either way but was curious why the change.

[stevensfo]

It is a real mess. I get hassle moving money to own accounts with banks and other financial institutions. It is pretty clear that banks do not have a way of identifying own accounts. A database of account ownership should do it. If someone applies for an account in my name, I should get a notification and have to confirm that it is me. After that, it should be plain sailing. For debit card transactions, listing the MasterCard and Visa merchant codes for FCA regulated firms on the FCA Register should do it. It all requires cross industry action.

I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds. Perhaps it will become wise to pay tradesmen in cash. That will increase tax evasion, of course (and they may get their accounts blocked on suspicion of money laundering ). I am considering replacing my Marcus account with a Skipton Building Society account, where I have the option of drawing money in cash or perhaps even getting an old fashioned counter cheque.

I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds.

Yes, this happened to me with Revolut. I'm pretty sure it was just a random check, but there's no need to lock the account.

I still keep my card because it's brilliant for travel, but their software irritates me sometimes. Like sending a few hundred quid to my son's Revolut account and being warned that it may be a scam, having to read all the warnings and wait... A good idea, but in this case, rather silly since all my previous transfers to him are documented, and we have the same family name.

Apart from the random checks, I think their algorithms are designed to look for patterns and flag up anything different or suspicious.

Steve

[didds]

I do not mind either way but was curious why the change.

his bank charges more to pay in cash than cheque?

That would be my guess. OR his branch closed so now he has to travel further during work hours to bank cash, and cheques can be posted for the cost of a 2nd class stamp.

[DrFfybes]

[...] Like sending a few hundred quid to my son's Revolut account and being warned that it may be a scam, having to read all the warnings and wait... A good idea, but in this case, rather silly since all my previous transfers to him are documented, and we have the same family name.

Apart from the random checks, I think their algorithms are designed to look for patterns and flag up anything different or suspicious.

Steve

If their algorithms were designed to look for patterns, they should spot and OK regular payments to family.

Paul

[stevensfo]

[...] Like sending a few hundred quid to my son's Revolut account and being warned that it may be a scam, having to read all the warnings and wait... A good idea, but in this case, rather silly since all my previous transfers to him are documented, and we have the same family name.

Apart from the random checks, I think their algorithms are designed to look for patterns and flag up anything different or suspicious.

Steve

If their algorithms were designed to look for patterns, they should spot and OK regular payments to family.

Paul

Yes, I agree.

I think that Revolut, like Wise and other new online banks, are paranoid about showing the authorities how careful they are. It's no secret that all these new banks are in competition with the old, powerful, established banks and they have a long struggle to show how responsible they are.

Steve

[GeoffF100]

It is a real mess. I get hassle moving money to own accounts with banks and other financial institutions.
...
I read reports of people being locked out of their accounts when trying to make payments of a just few hundred pounds.

Strange. I have not encountered this - though I don't do this on a regular basis, to banks and accounts I have not used previously.

Last week, I paid £16.5K to Vanguard. That went straight through. I then tried to pay £20K to HSDL. No luck. I phoned customer services and was put through to security. They asked some sensible questions and I was then able to make the payment. A couple of days later I tried to pay HSDL another £10K+. No luck again. I phoned customer services and was put through to security again. This time I was asked a huge number of questions from a script. I was on the phone for nearly an hour, but was finally able to make the payment. HSDL is an FCA regulated firm. I have had my HSDL account for about 15 years. I have made dozens of debit card payments to HSDL over that time. This all seemed to count for nothing. The more payments that I made, the more convinced Santander became that I was victim to a scammer.

[Lootman]

Last week, I paid £16.5K to Vanguard. That went straight through. I then tried to pay £20K to HSDL. No luck. I phoned customer services and was put through to security. They asked some sensible questions and I was then able to make the payment. A couple of days later I tried to pay HSDL another £10K+. No luck again. I phoned customer services and was put through to security again. This time I was asked a huge number of questions from a script. I was on the phone for nearly an hour, but was finally able to make the payment. HSDL is an FCA regulated firm. I have had my HSDL account for about 15 years. I have made dozens of debit card payments to HSDL over that time. This all seemed to count for nothing. The more payments that I made, the more convinced Santander became that I was victim to a scammer.

I made a few transfers of between £15,000 and £50,000 via a debit card or cheque in May and June from NatWest and they gave me no problem at all. But they did ask me questions when I took out more than £500 in cash a few times around the same time.

Maybe cash is more suspect to them. When I split the £500 cash withdrawals between two different banks then there was no problem. Annoying that I have to do that but the banks are close together so it wasn't too bad.

[AF62]

It is pretty clear that banks do not have a way of identifying own accounts. A database of account ownership should do it.

For that to work you would need a national government database of every individual with a unique reference number, otherwise the banks would be guessing that this account belonging to Jim Smith at 33 Acacia Avenue was also the same Jim Smith at 33 Acacia Avenue that was his son.

And a national government database of every individual with a unique reference number would mean that everyone would be sent a document with that unique reference number on it, which equals an identity card.

That went down well the last time it was suggested.

[genou]

It is pretty clear that banks do not have a way of identifying own accounts. A database of account ownership should do it.

For that to work you would need a national government database of every individual with a unique reference number, otherwise the banks would be guessing that this account belonging to Jim Smith at 33 Acacia Avenue was also the same Jim Smith at 33 Acacia Avenue that was his son.

And a national government database of every individual with a unique reference number would mean that everyone would be sent a document with that unique reference number on it, which equals an identity card.

That went down well the last time it was suggested.

If you want an ISA, you have to give up your NINO. So it's not beyond the wit of man to tie accounts to individuals. One of my offspring received a credit card style piece of plastic with a NINO on it - it looks remarkably like an identity card to me.

[GeoffF100]

It is pretty clear that banks do not have a way of identifying own accounts. A database of account ownership should do it.

For that to work you would need a national government database of every individual with a unique reference number, otherwise the banks would be guessing that this account belonging to Jim Smith at 33 Acacia Avenue was also the same Jim Smith at 33 Acacia Avenue that was his son.

And a national government database of every individual with a unique reference number would mean that everyone would be sent a document with that unique reference number on it, which equals an identity card.

That went down well the last time it was suggested.

You do not have to do that. Here is one possible mechanism. You kick the process off by clicking a box in your main bank account. That results in an entry on the database with a unique primary key plus the identity details that your bank holds.

You (or an imposter) sets up another bank account with the same details as yours. You bank sends you an alert asking you whether you opened that account. If you click the "yes" button, your bank knows that the account is yours, and the other bank is informed too. If you click "no", there is potential identity fraud, and the conflict has to be resolved. If you set up another bank account and do not get the alert, you need to check and correct the identity details that you have given the two banks.

The database entries also record the bank (or other regulated financial institution concerned), the account number, and the validation links. It would also be possible to implement the scheme as messaging system without a central database.

Nonetheless, nobody seems to object to HMRC allocating them a UTR. It would help if we had to provide that and our National Insurance Number when opening accounts, when that is applicable.

[Lootman]

For that to work you would need a national government database of every individual with a unique reference number, otherwise the banks would be guessing that this account belonging to Jim Smith at 33 Acacia Avenue was also the same Jim Smith at 33 Acacia Avenue that was his son.

And a national government database of every individual with a unique reference number would mean that everyone would be sent a document with that unique reference number on it, which equals an identity card.

That went down well the last time it was suggested.

If you want an ISA, you have to give up your NINO. So it's not beyond the wit of man to tie accounts to individuals. One of my offspring received a credit card style piece of plastic with a NINO on it - it looks remarkably like an identity card to me.

An ISA application form (from memory) actually asks for a NINO "if you have one". The presumption there is that some people do not have a NINO, e.g. an immigrant to the UK who never had a job and so never applied for one.

HMRC presumably know how to discover all the accounts for an individual, somehow or other.