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Beware the Faster Payment

Now I get faster payments.

Reason: I made one and screwed it up.

The other day I was online, doing banking stuff and, as Her Majesty Revenue & Customs (HMRC) Tax Office is forcing all of us to start doing things online, I sent in my VAT declaration electronically.

No big deal and, after a jittery start, all went swimmingly well.

At the end, the VAT office asked for payment to be made electronically too, so I signed in online and did the setup.

However, I decided not to pay there and then, as the monies weren’t due for a week.

So, one week later and in a rush as usual, I went through the payment process online.

With my two-factor authentication terminal at hand, I made that payment online.

Me, as a taxpayer and customer, had done all the work and so it cost the bank, Her Majesty and the environment nothing, as no paper changed hands at all.

Fantastic.

Then it got a bit weird as, a few weeks later, I get a VAT payment demand in the post.

Bad for the environment and for me, as I’d paid it.

I ring the VAT office and whine: “but I paid this”.

“No you didn’t, you little tax evader, and if you don’t pay now we’re going to send the boyz around”, says the upstart tax collections agent at the other end.

“What boyz are these?” I enquire.

“Urmm …”, losing his nerve a bit methinks, “the Back Street Boys?”

Sure, sure.

Well, they are adamant I haven’t paid, so I go online with the bank and look at the payment details on the account.

Oh no!

Sure enough, I had made the payment, but to VAT DHL rather than VAT HMRC.

These were the descriptors I had set up online to describe some epayments, with VAT DHL being for taxes demanded on imported goods.

Darnit.

So I ring the bank.

“Hello”, says the nice-but-dim customer service representative (NCSR) at the other end of the line.

“Hello”, mesays back. “I’ve messed up a bit I think, and made a payment to DHL rather than the HMRC for VAT.”

NCSR: “And how can I help?”

“Well”, mesays, wondering if this person heard me, “can you get my money back”.

NCSR: “Maybe. I’ll take a look …”

“Urmmm …. today perchance?” I have the patience of a gnat.

NCSR: “Alright. Name?”

“Chris Skinner.”

NCSR: “Account number and sort code?”

“83751681 and 93-56-29.”

NCSR: “No sir, that’s not your account.”

“Yes it is”, I assert. “What’s the problem?”

NCSR: “Not the right name.”

“Well, of course it isn’t”, I tut. “You asked for my name and it’s my business account, so the name is: Balatro Ltd.”

NCSR: “Well, you could have said that at the start Mr. Skinner.”

Hold one’s breath and count to ten.

NCSR: “Now then, I just need to ask you some security questions. Address.”

Yep.

NCSR: “Your secret pass code?”

Yep.

“The last payment from the account?”

Yep.

“The reason for your purchase of that downloaded porn movie?”

Damn those ACS:Law people.

NCSR: “OK, you pass. Now, what’s the problem?”

“Well”, mesays, “I paid my VAT the other day to the wrong account. I meant to pay it to VAT HMRC, and I accidently paid it to VAT DHL.”

NCSR: “When was this sir?”

“11th September.”

NCSR: “Ah yes, I see it.” Pause. “Tough.”

“What?”

NCSR: “I said ‘tough’ sir.”

“What do you mean, ‘tough’.”

NCSR: “Well you paid it.”

“I know, and I now want to revoke the payment and get the money back”, I badger.

NCSR: “Tough.”

“What do you mean, ‘tough’??”

NCSR: “Well, it’s your fault innit?”

“No it isn’t. It’s your banking service.”

NCSR: “Yes, but you did this with a Faster Payment.”

“Well, I didn’t ask for one.”

NCSR: “Tough.”

“Now I’m getting fed up with you saying ‘tough’. Why is it tough?”

NCSR: “Well, you’ve paid it by a Faster Payment. That’s like giving them cash. Unless they want to give you the cash back, then you’re screwed.”

At this point, I’m thinking something’s amiss.

“Can’t you just give me the money back?” I plead.

NCSR: “Nope. You gave them the money, they’ve got it, and so it’s nothing to do with us now.”

I hang up and ponder the fact that I know no-one in DHL to ask about getting the cash back and vow that, next time, I’ll send HMRC a cheque.

If interested, here are the FAQ’s on Faster Payments, with the clearest statement:

Question: Can I amend or cancel a Faster Payment once it has been sent?
Answer: No, once a Faster Payment has been sent you cannot amend or cancel it.

About Chris M Skinner

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here…

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  • Hi Chris,
    It seems that Faster Payments is missing functionality. The missing functionality is named the recall procedure. SEPA credit transfers started also in 2008 without this functionality. the SEPA edition 4 with go live begin november 2010 will allow this useful functionality.
    Abdelmajid Moujane

  • Fritz Thomas Klein

    Another piece of functionality that seems to be missing in the bank’s e-banking service: The possibility to enter a payment in advance with a future payment date. Standard service with my bank, so I can get piece of mind and keep the money until the due date.

  • Björn Flismark

    Hi Chris,
    Your bank has given you bad advice. You should call them again and explain to them that they have an obligation to help you get the money back.
    This is a requirement in the Payment Services Directive, article 74 (2). Your bank has to make “reasonable efforts to recover the funds”.

  • najada xhaxha

    your concern is right, maybe the person working at the Help-desk has no knowledges how to solve this problem and to advise you any solution. for example in my country, in this case, the Bank requires a debit authorization form from the beneficiary, in order to debit his account and to send money back. However, in any case the Bank should provide solutions

  • Hi Chris,
    The Faster Payments FAQ you cite is right, but it concerns different issues. Bjorn is also correct – even though you used the incorrect unique identifier, your bank “must make reasonable efforts to recover the funds involved in the payment transaction” (Regulation 74(2)(a) of the UK’s Payment Services Regulation 2009
    http://www.legislation.gov.uk/uksi/2009/209/regulation/74/made)
    No charge 😉