Standing order paid to wrong person - are they likely to keep the money?

[Kathyis6incheshigh]

My friend who I rent a room from when I work away from home asked me to set up a standing order for my rent.

So I did.

Unfortunately the sort code she gave me was out by one digit. (I have the email she sent me with it in.)

The other week (after 4 months) she noticed she wasn't getting any money from me. It had been leaving my account so I had no reason to think anything was wrong.

Anyhow, we rang our respective banks and mine has just called to say it turns out the money has been paid into someone else's account, so they have to write to the person to ask them to pay it back and if they won't I will have to take it to the small claims court.

WTF???

I didn't even realise two people would have the same account number - surely there enough digits in the world that this wouldn't be necessary? Anyway, given that the name of the recipient was on the standing order, surely it's the bank's fault for not checking?

Has anyone else experienced this and the person not paid back the money? Is it a massive hassle to go through the small claims court?

Your bank is talking bollocks.

If the name on the account was correct and the account number was wrong then the money should have gone into a holding account and would then have come back to you.

If it has genuinely gone into some random person's account then it is down to the bank to reimburse you and then claim the money back themselves. It is absolutely not down to you to faff about with small claims etc. They wouldn't legally be able to give you the details anyway under the data protection act.
If they argue the toss, email them and copy in the banking ombudsmen.

Idrank, you're a star - I thought it couldn't be right.
They said it was because it was online and the computer doesn't look at the name. Which, if it was the case, would surely be the fault of their system rather than me....?

It's really irritating isn't it!

Have you been into your branch or was it a bod on the end of a phone?
Try going into the branch if you can. They are definitely in the wrong.
It makes no difference whether a transaction is done online or over the counter. The rules are the same.

It was the phone. Can't get into my branch in the near future, which is a pity!

Thanks so much for this info.

well i work for a bank and if we set it up over the phone or the customer sets it up online, then the name is not an issue

it goes on sort code / acc no and ref to be tagged to it

the bank is not at blame because your friend give you the wrong details

You are not to blame if your friend gave you the wrong details. She should have noticed after the first payment went astray.

She should Welshdeb. I am so glad I still have her initial email with the account details otherwise I'd be agonising over whether it was my fault and probably giving her the whole amount all over again.

Hunnybun - acct no, sort code and ref? What is the ref you are referring to? If there had been some kind of reference which had to be matched up then obviously this would not have happened. My payment was labelled 'Kathyis6incheshigh rent' (though with my real name, obviously) so the person receiving it ought to have noticed, but there wasn't anything that had to be matched to that at their end for it to go through.

Thing is, I do think it's partly their fault (and my friend's, obviously) if their system has absolutely no safeguards built into it - ie one digit out and the money goes to someone else.

Sorry, but the money is sent electronically based on account number and sort-code these days - the name would usually not be transmitted with the payment.

The bank is not allowed to debit anyone's account unless they have their authority, so they can't just send the money back, they do have to ask their customer's permission.

The person who received the money in error can only (legally) refuse if they can show that they had reason to believe it was due to them (eg if they were expecting payments for the same amount) However, the bank can't make them give that permission and the issue is between you and the person you sent the money to incorrectly. See that's the issue it was you that sent the money, not the bank, they just followed your instructions.

FWIW it is practically impossible to get one digit in an account number wrong and it end up in a real account, but sortcodes are different (only 6 digits, and the first 2 represent the bank, so actually not that many to define branch)

Isit - thanks, that's helpful.
But can they give me the person's details so I can pursue it in the small claims' court? Or is that prevented by data protection rules as Idrankthechristmasspirits suggests?

If they legally would be expected to give it back unless they were expecting a payment for the similar amount presumably given that it was labelled as my rent payment they would also need to show they were expecting the amount as rent from someone called Kathy? Which means they would not have much of a leg to stand on.

No the bank can't give you their details, they can only pass on correspondence (including solicitor's letters if necessary)

Unfortunately though the recipient is not obliged to check their statements, so it they can show that he account balance was about what they would have expected it to be and that they spent the money in good faith, it doesn't have to be returned. It really depends what sort of figures are involved. e.g if they usually have a balance of say £200 and you sent £1000, they can't really argue that they thought it was their money, but if their account usually runs at c. £5k and you sent £100, they could have made a genuine mistake when withdrawing the money, thinking it was theirs. They have to show it has been spent though - if it's still in the account they have to return it.

Sorry, I've been a bit gloomy, Just to say, that in the vast majority of cases, when it is pointed out to people that they have received money that wasn't theirs, they do return it.

I think people keep their heads down hoping that the bank (or payer) won't notice the error, but they do comply when asked to give authority to debit the account back.

Money shouldn't be paid into an account where name doesn't match account.

This shouldn't matter whether it's an electronic payment or a cheque and if the banks have changed their T&C to get themselves out of this responsibility then frankly they need a bloody good kicking by the regulator.

It was £250 every month for 4 months so £1k total.
But I suppose whether they would be expected to have noticed that depends on what money is usually in their account.