In such a circumstance, customers can, granted by the political measure, notify their bank or building society that they have made an electronic payment to the wrong account and the bank will start the procedure in two working days.
If a bank is unable to reclaim funds immediately, for instance if the recipient disputes its return, the customer will be notified of the outcome of their bank’s investigation in a maximum of 20 working days from the point of enquiry and in many cases much sooner.
If funds cannot be recovered through the standard central process customers will be given clear and accurate information on the options they have available to them, such as court action against the recipient.
Banks and building societies will ensure the design of online, mobile and telephone payment channels reduce the risk of a customer making a mistake. This might involve: customers being asked to input account details twice, extra warnings about using the correct account details or prompting customers to check payment details that have not been used for some time so that they can be updated or deleted as necessary.
If a customer does not get the service they should expect under this new Code they should firstly follow their provider’s formal complaints procedure, and failing a satisfactory outcome, take their complaint to the independent Financial Ombudsman.
The new Code cannot guarantee a customer will always recover any money paid in error but it will make sure that the customer knows the outcome quickly and consistently, and enable them to seek legal advice or take further action if required. The new Code will be monitored, and the number of customers using it tracked, to assess whether further refinements are needed.
Financial services providers Adam & Company, Barclays, Clydesdale Bank, Coventry Building Society, Coutts, HSBC Bank plc, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander UK plc, Tesco Bank, The Co-operative Bank, The Royal Bank of Scotland, Ulster Bank and Yorkshire Bank have signed up to the new Code and are updating their procedures accordingly. Others are expected to announce their participation in the near future.
Research conducted by the Payments Council found that 63% of the British know their electronic payments are addressed using the sort code and account number. Almost half, or 49%, erroneously thought the name of the recipient is checked, while 15% wrongly believed the recipient’s post code is checked.
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