Peter Teich was expecting a payment of £193,000 from the estate of his late father. His father had been a renowned historian of science at Cambridge, and had lived to be 100. Mr Teich is 74 and disabled. He had accidentally got one digit wrong when providing his sort code to his solicitor, and the funds were misapplied to another customer’s account with Barclays Bank. The person who had received the money then refused to return it and started to spend it.
The banking industry had promised that from mid 2019, name checks on customer accounts would be carried out when performing bank transfers of this type. However, unfortunately this has not yet happened, because it would have prevented the problem in this case, as the names would not have matched up correctly.
Having initially said that it would restore the money within a week, Barclays then wrote to Mr Teich to say that he had been misadvised, the error had been on his part, and that they were unable to return the funds and had instead credited his account with a small token gesture of £25.
If money has been credited to the wrong account the recipient is not legally entitled to keep it, however compelling them to return it is problematic. Banks will not even provide the name of the recipient unless compelled to do so by a court.
After two visits to court and legal fees totalling £46,000, Mr Teich got two court orders; one identifying the other customer, and a second forcing them to repay the money. Barclays then refused to refund Mr Teich’s legal costs, but when in a last ditch attempt he asked the Guardian newspaper to help, the bank changed its mind almost immediately, and repaid the legal fees, along with £750 compensation. Talk about too little, too late.
It is to be devoutly hoped that name checking by the banks will come into force as soon as possible, to prevent this type of case from happening again.