How to avoid banking nightmare

Bank accounts are something most of us rely on every day to receive wages, spend our hard-earned cash and pay bills.

So, when something goes wrong, it is crucial to get the problem fixed as soon as possible.

What should I do if my bank has paid the wrong person?

All it takes is one wrong digit for your cash to end up in the wrong account when you are making a payment. In some cases, even transfers using the correct details can go astray by mistake, according

When this happens, it is important to notify your bank as soon as possible. Although providers can not automatically reverse a transaction as a general rule, the quicker mistakes like these are picked up, the better.

Even if it was your mistake, banks must make a reasonable effort to recover the money – but it won’t have to cover any losses if its efforts don’t work.

On the other hand, if your bank made the mistake and sent money to the wrong account, it must refund the amount of the payment to your account, plus any charges or interest you pay as a result.

The process of tracing missing funds did tend to be slow in the past, but new voluntary guidelines mean that banks should act fast to claw back cash, once an account holder has raised the issue.

If there are difficulties in getting back the funds, the bank will investigate further and report the results back to the customer within 20 working days.

Although there is still no guarantee money will be returned, the new code will do much to speed up the process and keep consumers in the loop.

If you believe your bank is not fulfilling its responsibilities, you can make a complaint to the financial industry’s regulator.

Can the bank refuse to honour a payment?

If a bank refuses to make a payment – either a direct debit or simple payment on your card – this can often leave the card holder in a sticky spot.

But is your bank allowed to bounce a payment?

The simple answer is yes – but only under certain circumstances. For example:

There are not enough available funds in the account.

The agreed terms and conditions have been broken.

If the payment is made it would be unlawful.

If a bank has returned a payment, it must let the customer know as soon as possible. It may also charge customers for issuing a payment that has bounced.

When can my bank charge me?

Most people will be aware that banks can make you pay interest on overdrafts, returned and paid item charges and account maintenance fees.

But fewer people realise that banks have the right to take money out of your account to pay off debts in another account, such as loans, credit card payments or other current accounts, with the same provider.

This right to ‘set-off’ does come with some conditions, though.

Banks must inform accountholders at least 14 days before any money is taken, leave enough cash in the account to meet ‘priority debts and essential living expenses’ and refund any money it takes that is needed for those expenses.

It must also refrain from taking any money intended for a particular purpose, such as healthcare, or if it is intended for a third party.

In all cases the bank has to inform customers after it has taken the money.

I have been a victim of fraud, what should I do?

One of the best ways of preventing fraud is to make sure you keep any eye on your bank statement.

Online banking developments and apps helping you manage your account on-the-go mean this can be done at the touch of a button – so there really is no excuse to bury your head in the sand.

Scanning your statement frequently is not only a good way to keeping on top of spending, but it means any unusual or unrecognised transactions are picked up quickly.

Top tips: How to prevent fraud

Make sure everything with your name, address or financial details is shredded before it is thrown away.

Never give your bank security or login details, full password or account numbers to anyone over the phone or on the Internet, even if they say they are from your bank.

Comb through statements carefully to pick up any fraudulent transactions and notify your bank.

Contact the bank should any expected letters or statement not arrive.

Make sure all address changes are made should you move and make sure any mail is redirected.

Check your credit rating for unusual activity made in your name.

The first thing to do if you suspect you have been a victim of fraud is to contact your bank. Most will have a dedicated line for reporting fraud.

Your bank must refund any money that has been taken from an account, unless it can prove you acted fraudulently, were grossly negligent or the transaction was legitimately authorised.

It also has to repay any fees or charges the unauthorised transaction caused.

Banks may also issue you with a new debit card or pin, and should be able to block any further fraudulent transactions.


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