I am about to lose my home and do not know where to turn. My partner and I took out a second £ 40,000 mortgage through Countrywide In the past year. It should have been transferred to my partner’s account, but did not arrive. I made several calls to Nationwide who said the money was paid, but refused to confirm the recipient’s details, citing data protection.
The system did not allow me to access my online application, and it was only when the direct debit confirmation came in the mail that I realized that the loan had been paid to my son’s new Lloyds account. I accidentally entered his account number along with my partner’s name on my mortgage application. My son said he didn’t receive any money, and for the next five weeks I tried in vain to track him down. But in the end it turned out that £ 40,000 had been deposited into my son’s account five weeks earlier and that he had spent it.
Since then, my life has been terrible. My son tied me to him when my life was falling apart, and now he faces a criminal case. I am the surety for his apartment, so if he stops paying for the apartment, I will also be responsible. Lloyds did not answer either Nationwide or me. Why can the bank make a bank transfer if the name does not match the account number? And why does the bank warn me if an odd amount is spent and my son, a new minimum wage client of Lloyds, can get and spend a huge amount in one day without any verification?
We now have to pay off the lost loan and the debts it was supposed to cover. I lost everything, including my son.
KM, Darlington, County Durham
Your heartbreaking situation reveals the hidden cost of instant digital payments. Huge amounts can be transferred and distributed within hours, which is why banks are increasingly being forced to take security measures to protect customers from fraud or error. One of these is Beneficiary Confirmation (CoP), which the banking sector has long fought against as being too complex, but finally introduced by the big banks in 2019. Most importantly, this verifies that the recipient’s name and account number match. So why didn’t this happen in your case?
Nationwide says it does not use CoP for payments when the customer is not present, and the payment services regulator has confirmed that while it requires banks to verify the account name when processing payments from customers, it is not necessary for bank-to-bank transactions when the customer has provided payment details in writing. If that were the case, the payment would have failed and you would have discovered your mistake. Meanwhile, anti-money laundering regulations require receiving banks to request unusual transactions and, if necessary, freeze amounts while they are being verified. However, this usually applies to faster payments, a form of electronic instant payments sent by an individual.
Lloyds says that amounts received by a bank gero loan directly from another bank are usually not considered suspicious, as the sending bank will conduct its own checks.
It is now clear that you were at fault because it is very important to check and recheck account details, especially when large amounts are at stake. Unsurprisingly, you want the banks to recover the lost £ 40,000 because their systems have allowed the mistake to go unnoticed. The voluntary fraud reimbursement scheme only applies to those who have been tricked into transferring money to a fraudster. Although you fell victim to a scam, it was because you misdirected a loan.
Banks are not entirely flawless, however. Lloyds, in particular, postpones his answers. When you wrote to me three months after the wrong payment, the £ 10,581 remaining in your son’s account was still not returned to you. Lloyds and Nationwide blamed each other until I discovered that Lloyds had lost or ignored an important document sent by Nationwide two months earlier to authorize the release of funds.
It wasn’t until I brokered between the two companies that the money finally reached you – four months after the bug was discovered.
Nationwide states: “We have made every effort to help members get their funds back, including through a damages process that is usually only used in cases of fraud. We understand that it took a long time, but we could not do anything until we received an answer from Lloyds. “
Lloyds says: “As soon as we knew what happened, we took steps to secure any remaining money in the account so that it could be returned to Nationwide. We apologize for the delay in processing the refund form. “
Your case now resides with the Financial Ombudsman Service, which has the power to decide if there are any deficiencies in the service and if any compensation is required. After you wrote, your son pleaded guilty to dishonest withholding an improper loan and received a 16-month suspended sentence.
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