Money from bank account gone to wrong customer account.

muffler

Apologies in advance if this is a bit grey here and there but as matters are ongoing I cant say too much.

A friend of mine recently agreed to have a service provided by a particular company that would entail payment for that service by monthly direct debit for a specific period of time. Everything was agreed by phone by both parties and bank details for the direct debit were passed on. A few days after the service was provided she received a letter from her bank advising her that a particular amount of money would be paid on a specific day to this company. This apparently would be normal enough.

However the monthly amount that was to be paid (and has since been paid) was a bit odd and didnt tally up with what the company told her. So after making a couple of phone calls the company concerned suggested at the outset that her bank account had been hacked but later in the day conceded that the money taken from her bank account had in fact been paid or credited to another of their customer's account.

So the company more or less says "sorry about that but you will have to contact your bank to get the money back and by the way we will be taking the amount we agreed from your account next Tuesday as we cant stop the DD" :eek:

Where does she stand now though. She is going to the bank in the morning but will they be able to (a) secure the return of the money already taken? (b) stop the true payment by DD that is due to go on Tuesday?

Does this smell of fraud? Is there a breach of Data Protection here? Is this something that should be notified to the Gardai, Financial Regulator, Data Protection Commissioner? The Pope?........

Just to note that the service that was provided has now been cancelled under the company's T & C' (cooling off period)

Any advice or comments would be greatly appreciated.

Tow

You post is not clear.

Assumptions:
1. Payment made by SEPA direct debit from an Irish bank account.
2. Company took money from OP Friend, but credited it against "another of their customer's account" on their accounts system.

Ideal solution: Company 'recover' payments from 'another of their customer's account' and correct OP Friends details on their systems. What company does with 'another of their customer's account' is their internal problem. This would be covered by the Data Protection Acts.

So the company more or less says "sorry about that but you will have to contact your bank to get the money back and by the way we will be taking the amount we agreed from your account next Tuesday as we cant stop the DD

The companies solution will create more work for them.
The OP Friend can get a no questions refund of the last 8 weeks debits from the company and if the OP Friend can prove "the monthly amount that was to be paid (and has since been paid) was a bit odd and didnt tally up with what the company told her" the previous 13 months of debits or in reality from the date the company switched to SEPA Direct Debits. This comes under the remit of the Financial Regulator.

BTW: SEPA direct debit can be recalled, but this is not a capability all the banks have implemented.

28064212

Assuming it's a SEPA direct debit, http://www.ipso.ie/section/SEPADirectDebit

Specifically, debtors can:

• Specify Creditors who may not collect SEPA Direct Debits from your bank accounts
• Request a refund for any SEPA Direct Debit within eight weeks from the date on which the SEPA Direct Debit was debited from your account. Within the eight week period your bank MUST refund you on a no-questions asked basis

Do not let the bank put you off with any excuses. They may suggest resolving it with the Creditor instead. This is nonsense. If the debit was collected within the last 8 weeks, the bank has to refund the debit. There is no wiggle room on this point.

The only exception would be if the Creditor was using the SEPA SDD Business Service, but in that case, your friend would have had to complete a Debtor Confirmation "where debtors will waive their right to the 'no questions asked refund' for authorised transactions and confirm that they are a business customer"

What the Creditor did with the debit it collected is irrelevant and solely their problem to resolve.

28064212

muffler wrote: »

Does this smell of fraud? Is there a breach of Data Protection here? Is this something that should be notified to the Gardai, Financial Regulator, Data Protection Commissioner? The Pope?........

It doesn't sound like there is any fraud or Data Protection issue. Your friend gave permission to the company to debit money from their account. Where the money goes after that isn't really relevant. It sounds like the company entered the wrong recipient account for the collection.

muffler

Many thanks for the replies folks, much appreciated.

Just for simplicity here we can refer to the friend as "A". This is all very recent as in the last few days and there has been only one payment taken from A's bank account with another payment due to be taken tomorrow. In another call to the company concerned they have confirmed that that they have 2 customer accounts "registered" to A's bank account....A's account and a/n other. Hope that makes sense. That should never ever happen in any business.

The realist in me says that this was human error but the doubter in me is asking if there's a possibility that someone in that company is having a free service provided at A's expense or that one of their friends is availing of the service at A's expense. I assume it is possible but I would like to think unlikely though.

As we speak/type A is in the local branch of the bank to discuss the matter there. I'll let you know how she gets on.

muffler

Tow wrote: »

Assumptions:
1. Payment made by SEPA direct debit from an Irish bank account.
2. Company took money from OP Friend, but credited it against "another of their customer's account" on their accounts system.

Correct assumptions .

muffler

28064212 wrote: »

Your friend gave permission to the company to debit money from their account. Where the money goes after that isn't really relevant.

Yeah this is the part I have the issue with. "A" did give the company permission to take money from her bank account but only to pay for the service that she was availing of. As it turns out someone else is also availing of the service at A's expense...hopefully on a temporary basis.

Where the money goes afterwards is more than relevant I would have thought particularly in this instance.

28064212

muffler wrote: »

In another call to the company concerned they have confirmed that that they have 2 customer accounts "registered" to A's bank account....A's account and a/n other. Hope that makes sense. That should never ever happen in any business.

Easy enough to happen, depending on their accounts/customer managment software. Especially as it was done over the phone, so you've got a human sitting there entering details

muffler wrote: »

The realist in me says that this was human error but the doubter in me is asking if there's a possibility that someone in that company is having a free service provided at A's expense or that one of their friends is availing of the service at A's expense. I assume it is possible but I would like to think unlikely though.

I would say extremely unlikely, simply because it would be trivial to discover, and almost certainly a dismissal for anybody involved.

muffler wrote: »

Yeah this is the part I have the issue with. "A" did give the company permission to take money from her bank account but only to pay for the service that she was availing of. As it turns out someone else is also availing of the service at A's expense...hopefully on a temporary basis.

That's not how direct debits work though. As far as the bank is concerned, "A" has given the company permission to debit her account. The bank doesn't know how much or how often, only that the company has permission. That's why a customer can return any direct debit with no questions asked.

muffler wrote: »

Where the money goes afterwards is more than relevant I would have thought particularly in this instance.

Ah, I misunderstood. When you say it went to one of their customer's accounts, you mean the company recorded the debit against the wrong customer, correct? I thought you meant they deposited the money to a customer's bank account.

So the money hasn't actually "gone" anywhere, they just recorded it as being for the wrong person. However, the company probably made both direct debit requests in the same file. They can't recall that file, so they're correct in that they can't really do anything to stop the next collection.

One thing that's not clear: does "A" actually owe money to the company? You say they cancelled the service, but do they owe for the first month (i.e. what should have been Tuesday's payment) or should both payments be cancelled?

Tow

28064212 wrote: »

The only exception would be if the Creditor was using the SEPA SDD Business Service

SEPA SDD Business Service is a Irish bodge to the SEPA system, as the Irish banks did not think there was a need to implement SEPA B2B.
In my view is stands on very thin legal grounds.

It is only recognised for the following banks/BICs:

AIB Bank AIBKIE2D
Bank of Ireland BOFIIE2D
BNP Paribas BNPAIE2D
Danske Bank DABAIE2D
Permanent tsb IPBSIE2D
Ulster Bank Ireland Ltd. ULSBIE2D
Citibank Europe PLC CITIIE2D
Royal Bank of Scotland PLC ABNAIE2D
Bank of America N.A. Dublin BOFAIE3X
Barclays Bank Ireland PLC BARCIE2D

28064212

Tow wrote: »

SEPA SDD Business Service is a Irish bodge to the SEPA system, as the Irish banks did not think there was a need to implement SEPA B2B.
In my view is stands on very thin legal grounds.

Oh, I know The first time a Business Service payment dispute makes it to the courts, the whole thing is going to collapse

muffler

28064212 wrote: »

Ah, I misunderstood. When you say it went to one of their customer's accounts, you mean the company recorded the debit against the wrong customer, correct?

Yes, that's correct.

28064212 wrote: »

So the money hasn't actually "gone" anywhere, they just recorded it as being for the wrong person.

Well it's gone from A's bank account and I assume that the other customer has now had their monthly payment marked as paid. Just to note that after A set all this up she got a letter from the bank indicating that a payment was being taken from her account last Friday. The letter give an account number to which the payment would be made and as it turns out that account number does not belong to A and that has been confirmed by the company.

28064212 wrote: »

One thing that's not clear: does "A" actually owe money to the company? You say they cancelled the service, but do they owe for the first month (i.e. what should have been Tuesday's payment) or should both payments be cancelled?

No, no money owed. She was within the cooling off period (up tomorrow) and given all that had happened she had no confidence in the company and cancelled last Friday. There is no penalty or any money due once cancellation has been activated within the 14 day cooling off period.

28064212

muffler wrote: »

Well it's gone from A's bank account and I assume that the other customer has now had their monthly payment marked as paid. Just to note that after A set all this up she got a letter from the bank indicating that a payment was being taken from her account last Friday.

From the bank? Are you sure the letter wasn't from the company? Under SEPA, the company is required to notify the debtor prior to collection, not the bank.

muffler wrote: »

The letter give an account number to which the payment would be made and as it turns out that account number does not belong to A and that has been confirmed by the company.

I assume you mean customer account number as opposed to bank account number here? Still sounds very much like an input error on the companies side.

muffler wrote: »

No, no money owed. She was within the cooling off period (up tomorrow) and given all that had happened she had no confidence in the company and cancelled last Friday. There is no penalty or any money due once cancellation has been activated within the 14 day cooling off period.

Grand so, instruct the bank to reverse the debit and refuse any further debits to that Creditor. It's possible Tuesday's debit might still go ahead, depending on the bank's processes, but just reverse that on Wednesday if it does. Contact the company to inform them that all business is completed after your friend has their refunds (just a courtesy, they can't do anything about it anyway)

muffler

28064212 wrote: »

From the bank? Are you sure the letter wasn't from the company? Under SEPA, the company is required to notify the debtor prior to collection, not the bank.

Definitely from the bank. I thought that a bit odd myself. No letter from the company, yet, although she did receive a couple of text messages but I dont think those had anything to do with any payments.

28064212 wrote: »

I assume you mean customer account number as opposed to bank account number here? Still sounds very much like an input error on the companies side.

Sorry, it is indeed the company's customer account number I was referring to. I should have been clearer as we are actually making reference to both company and bank account numbers.

28064212 wrote: »

Grand so, instruct the bank to reverse the debit and refuse any further debits to that Creditor. It's possible Tuesday's debit might still go ahead, depending on the bank's processes, but just reverse that on Wednesday if it does. Contact the company to inform them that all business is completed after your friend has their refunds (just a courtesy, they can't do anything about it anyway)

Well A has returned from the bank a little while ago and things worked out pretty much as you described. She was told that they would get her the money back that was taken last Friday. They said they couldnt see a DD for tomorrow but advised her to check her account again before 3 PM tomorrow and if any other money was taken they would have it refunded back to her bank account immediately.

The odd thing is that they (bank) couldnt see the DD for tomorrow and they couldnt see a DD for the money taken last Friday. They could see the payment having gone from her account on Friday but nothing to show that it was as a result of a DD though. The mind boggles.

The bank official she was talking to told her that they were "tortured" with money issues concerning this company. They have had a steady stream of customers calling to them over the years. Every time something goes wrong with the payments the company tell the customers to go to their bank and sort it apparently.

28064212

muffler wrote: »

Well A has returned from the bank a little while ago and things worked out pretty much as you described. She was told that they would get her the money back that was taken last Friday. They said they couldnt see a DD for tomorrow but advised her to check her account again before 3 PM tomorrow and if any other money was taken they would have it refunded back to her bank account immediately.

The odd thing is that they (bank) couldnt see the DD for tomorrow and they couldnt see a DD for the money taken last Friday. They could see the payment having gone from her account on Friday but nothing to show that it was as a result of a DD though. The mind boggles.

They can't see a DD on Friday, but can refund that DD :pac: Sadly, not terribly surprising, some of the bank's direct debit processes are a mess, especially since SEPA came in.