£8,000 loss for wrong sort code

BANKS and building societies are constantly encouraging customers to do their banking online, but they are leaving them in the lurch when things go wrong.

Nationwide customer Nicola Holmes is £8,000 out of pocket after her building society accused her of incorrectly entering the wrong sort code during an online transaction.

Oxford-based Nicola, who has just given birth to a daughter, Olivia, had set up a £16,000 transaction from her online account to pay a building contractor for work done to the house in which she lives with her partner, Andrew Mossman.

After the builder contacted her to say the money hadn't arrived, she queried the building society about the transaction and was told the money had been sent to another Nationwide customer's account. The customer had the same account number as the builder, who banks with Lloyds, and the same sort code as Nicola.

By the time Nationwide froze the account, the recipient had withdrawn £8,000. Nicola has been credited back the remaining £8,000 but has been told by Nationwide to go to court to claim the rest of the money back.

She said: 'I do not believe I entered the wrong sort code in the first place. Nationwide told me I entered my own sort code but why would I do that? Nationwide dragged its feet when investigating this, no doubt leaving the person who had my money even more time to make more withdrawals. I am very upset with the way it has absolved itself of all responsibility in this case.'

Nationwide said it is the responsibility of customers to ensure account details are correct when they make online payments. The Swindon-based building society said it was unfortunate that the intended recipient's account number matched that of one of its own.

A Nationwide spokesman said: 'Although Miss Holmes is adamant that she didn't use the incorrect details when setting up the bill payment, our records show that she did and we have advised her to contact a solicitor for legal advice as quickly as possible, to help her recover the monies already spent.

'The credit of funds through the Bankers Automated Clearing System (BACS) is automatic and as such, no cross checking of reference numbers and names is possible and the society is not liable for Miss Holmes' loss or for recovering the monies spent.'

However, according to the Association for Payment Clearing Services (Apacs), the organisation representing the banking community, it is the banks' responsibility to check that transfers are going to the intended recipient.

Under the Banking Code, if the customer names the person they are transferring the money to, it is up to the bank to make sure it is going to the right account. If something goes wrong, the financial institution is responsible. If the customer doesn't name the person they are transferring the cash to, then it is their responsibility if it goes missing.

An Apacs spokesman said: 'It boils down to whether the account name is used, as the account name has primacy over account number. There is also a duty of care, however, on the destination bank to check, for their customers, that a correct amount is credited to the correct account, although how this is exercised is a matter for individual banks to answer.'