7 ms·

This is kind of shitty, but once the situation occurred (due to the stupid and IMHO inexcusable situation of "An oddity in Teich’s case is that Barclays also ap

This is kind of shitty, but once the situation occurred (due to the stupid and IMHO inexcusable situation of "An oddity in Teich’s case is that Barclays also appeared to have identical account numbers for two different customers") there really aren't good solutions of the (unintended) recipient disputes the reversal and claims that that's money intended for them. 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.

londons_explore 7y ago
There's a good chance it was a 'no win, no fee' type lawyer. 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.
- Waterluvian 7y ago
  That just gave me a terrible idea. Legal fee underwriters who basically bet on winning cases.
  - icelancer 7y ago
    This is a thing. There are plenty of people who will fund your lawsuits against others and take proceedings. 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.
  - rjknight 7y ago
    This does already exist https://en.wikipedia.org/wiki/Litigation_funding https://en.wikipedia.org/wiki/Litigation_funding
  - Lazare 7y ago
    It's a huge business! Not sure if that makes your idea terrible or not though...maybe both?
    - Waterluvian 7y ago
      Seems like a perversion of the criminal or tort system. So yeah, both!
  - hogFeast 7y ago
    Burford Capital, LCM Finance, Manolete Partners are all publicly listed companies in the UK that do this (iirc, there was a change in the law a few years ago that meant this industry really started at scale in the UK). 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).
tedivm 7y ago
Barclays, knowing that they had committed to doing name checks by "mid 2019" and had to delay on their end, and knowing that this situation occurred because they gave multiple people the same account number, could have had their lawyers deal with this (or directly pay for his lawyers otherwise) instead of basically telling him to bugger off.
thaumasiotes 7y ago
> But the payment laws pretty much implicitly assume that the account numbers are unique, and they weren't in this case 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?
- PeterisP 7y ago
  > 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.
Aeolun 7y ago
I don’t think this is necessarily true, since account numbers are bound to people. If I transfer money to Jim, then the most important part is that it arrives with Jim, not that it arrives on account nr xxx.
- matthewheath 7y ago
  What part don't you think is true? The bank only has to match on the account number and sort code by law. It's not required to do name matching (and even the proposed name matching scheme will be voluntary). It might be important to you that the money goes to Jim, but from the bank's perspective they executed the instructions correctly.
  - burpsnard 7y ago
    I once took a call in our office, looking for a "mrs x y". I said sorry noone of that name here. The others come back from lunch, turns out "x y" is a legal alias of colleague "v w", and it was the bank calling.
matthewheath 7y ago
The UK doesn't have any banking secrecy laws — protection of account details falls under the Data Protection Act 2018 but the general principle was established in common law by Tournier v National Provincial and Union Bank of England [1924] KB 461
- PeterisP 7y ago
  Okay, I was mistaken there, that seems to be country-specific; and according to http://www.legislation.gov.uk/uksi/2017/752/regulation/90/made http://www.legislation.gov.uk/uksi/2017/752/regulation/90/ma... they should have disclosed the contact info (or sufficient information to sue) at the payer's request. That would have prevented the need for the first (but not the second) lawsuit.
  - matthewheath 7y ago
    Yes, I agree that S90(4) was breached there.
awinder 7y ago
Maybe some details are missing but for such a sum, maybe Barclays should have had someone in legal helpfully call the problem customer and explain that they were never going to get away with it, it would cost them more in the long run, and oh yeah, that they weren’t going to be a Barclays customer if they didn’t return the cash?
- gregoriol 7y ago
  Yes, that's how you handle such a thing!

londons_explore 7y ago

There's a good chance it was a 'no win, no fee' type lawyer. 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.

Waterluvian 7y ago
That just gave me a terrible idea. Legal fee underwriters who basically bet on winning cases.
- icelancer 7y ago
  This is a thing. There are plenty of people who will fund your lawsuits against others and take proceedings. 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.
- rjknight 7y ago
  This does already exist https://en.wikipedia.org/wiki/Litigation_funding https://en.wikipedia.org/wiki/Litigation_funding
- Lazare 7y ago
  It's a huge business! Not sure if that makes your idea terrible or not though...maybe both?
  - Waterluvian 7y ago
    Seems like a perversion of the criminal or tort system. So yeah, both!
- hogFeast 7y ago
  Burford Capital, LCM Finance, Manolete Partners are all publicly listed companies in the UK that do this (iirc, there was a change in the law a few years ago that meant this industry really started at scale in the UK). 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).

tedivm 7y ago

Barclays, knowing that they had committed to doing name checks by "mid 2019" and had to delay on their end, and knowing that this situation occurred because they gave multiple people the same account number, could have had their lawyers deal with this (or directly pay for his lawyers otherwise) instead of basically telling him to bugger off.

thaumasiotes 7y ago

> But the payment laws pretty much implicitly assume that the account numbers are unique, and they weren't in this case 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?

PeterisP 7y ago
> 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.

Aeolun 7y ago

I don’t think this is necessarily true, since account numbers are bound to people. If I transfer money to Jim, then the most important part is that it arrives with Jim, not that it arrives on account nr xxx.

matthewheath 7y ago
What part don't you think is true? The bank only has to match on the account number and sort code by law. It's not required to do name matching (and even the proposed name matching scheme will be voluntary). It might be important to you that the money goes to Jim, but from the bank's perspective they executed the instructions correctly.
- burpsnard 7y ago
  I once took a call in our office, looking for a "mrs x y". I said sorry noone of that name here. The others come back from lunch, turns out "x y" is a legal alias of colleague "v w", and it was the bank calling.

matthewheath 7y ago

The UK doesn't have any banking secrecy laws — protection of account details falls under the Data Protection Act 2018 but the general principle was established in common law by Tournier v National Provincial and Union Bank of England [1924] KB 461

PeterisP 7y ago
Okay, I was mistaken there, that seems to be country-specific; and according to http://www.legislation.gov.uk/uksi/2017/752/regulation/90/made http://www.legislation.gov.uk/uksi/2017/752/regulation/90/ma... they should have disclosed the contact info (or sufficient information to sue) at the payer's request. That would have prevented the need for the first (but not the second) lawsuit.
- matthewheath 7y ago
  Yes, I agree that S90(4) was breached there.

awinder 7y ago

Maybe some details are missing but for such a sum, maybe Barclays should have had someone in legal helpfully call the problem customer and explain that they were never going to get away with it, it would cost them more in the long run, and oh yeah, that they weren’t going to be a Barclays customer if they didn’t return the cash?

gregoriol 7y ago
Yes, that's how you handle such a thing!