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ombudsman news

issue 24

January 2003

banking - disputed cash payments in

A number of the complaints we receive concern disputes about cash paid into bank accounts - whether over the counter or through a deposit point. Sometimes the entire payment appears to have gone missing; sometimes the firm has credited the customer's account with a smaller amount than the customer recalls paying in.

Such disputes can cause emotions to run high. Often, both firms and customers feel that their integrity is in question and they assume we will attempt to settle matters simply by deciding which party we "believe". But that is not what happens.

We collect all the available evidence and information so that we have as full a picture as possible of the circumstances surrounding the disputed payment. More often than not, a complaint of this type is decided on the balance of probabilities - in other words, on what, in the light of the evidence, we think is most likely to have happened. If we do not uphold the complaint, it is generally because the firm's recollection of events is more probable than the customer's, or because the customer's recollection is at odds with the documentary evidence.

The evidence we examine when we look into such disputes can include:

  • any receipt issued for the payment;
  • the firm's video footage (though this is often inconclusive);
  • any documentary evidence from the customer of where the cash came from;
  • the firm's cash reconciliation records;
  • the firm's deposit point records.

We obtain a detailed statement of the customer's version of events and normally ask for corroborating statements from any third parties or witnesses involved. We may also ask for details of any accounts the customer holds with other firms, so that we can make enquiries there.

Similarly, we obtain a statement from the employee or employees involved. If there is any suspicion of fraud, we will find out whether any previous, similar complaints have been brought against that employee or branch. If they have, we will examine the firm's internal investigation papers.

Where a significant period of time has elapsed between the disputed cash payment and the customer's complaint about it, then the complaint will clearly be much more difficult to investigate. Recollections become less clear over time and documentary evidence may have been lost or destroyed as part of routine clearing of files.

Any firm that receives a complaint of this type must take care not to destroy any associated documentation. It should also make sure that any staff members involved write down their recollections of events as quickly as possible.

banking case studies - disputed cash payments in

24/5
discrepancies between branch cash records and customer's deposit via self-service deposit facility

Ms J said that she paid £300 into her bank account, via the firm's self-service deposit facility, in order to meet forthcoming bills. However, the firm told her it had no record of receiving the payment.

complaint upheld
We looked at all the available evidence. Although there had been no similar complaints about that branch, there were some discrepancies in the branch cash records that the firm could not explain. Ms J appeared to be an honest and reliable witness and it was clear from her bank statements that she regularly paid in a similar amount to cover certain bills.

We concluded, on the balance of probabilities, that Ms J's recollection was likely to be correct. We therefore required the firm to make good the deposit and to pay Ms J £50 to compensate her for the inconvenience she had suffered.

24/6
over-the-counter deposit - authenticity of receipt disputed

Mrs A said that she paid in £1,600 over the counter at a branch of the firm, to be credited to her credit card account. The firm said it had no record of receiving the money and it disputed the authenticity of the "receipt" she produced, which was ragged and partly illegible.

Mrs A explained the state of the receipt by saying that she had left it in the pocket of her jeans when they went in the wash.

complaint rejected
We found no evidence of any discrepancy in the branch's records of cash payments. However, those parts of Mrs A's receipt that were still legible revealed an amount that was different from the one she claimed to have paid in, together with part of an account number that was not hers. On the balance of probabilities, we thought the firm's version of events was more likely to be correct. We therefore rejected her complaint.

24/7
amount of deposit disputed - "lost" cash - deposit slip altered by firm

Mr K said that he had visited his branch to make a payment into his savings account - comprising a £1,000 cheque and £500 in cash. He said he paid the money over the counter and was given a stamped deposit slip for £1,500.

When he received his bank statement a month later, Mr K found that the firm had credited him with only £1,000. He raised this with the firm and was told this was the total amount he had paid in. Insisting that he had paid in more than this, he made a formal complaint. However, the bank maintained he must have been mistaken, so he came to us.

complaint upheld
When the firm had processed Mr K's payment, it had found no cash, only the cheque for £1,000. All the cash tills had balanced, so it concluded that the deposit slip must have been incorrect.

It had therefore altered its copy of the deposit slip. The firm claimed that, following its standard practice in such situations, it would have sent Mr K a computer-generated letter telling him what it had done.

As the cashier who had stamped Mr K's deposit slip was no longer with the firm, we were unable to obtain a statement from him, but we noted that the slip had not been completed in full. It detailed the total amount paid in, but not how the payment was made up.

Although the firm said it would automatically have contacted Mr K to tell him it had adjusted its record of the amount paid in, there was no evidence it had done this. And we thought that Mr K would have complained right away had he received such a letter.

Since it seemed likely that Mr K's version of events was correct, we required the firm to credit him with £500 and to pay him £75 compensation for inconvenience.

24/8
lost receipt - customer's claim that cash withdrawals made up of notes not in circulation

Mr D, who lived in Scotland, claimed that he had deposited £1,000 in cash into his account with firm A. So he was most concerned when his bank statement showed that he had deposited just £100.

He said that the £1,000 came originally from his account with firm B. He claimed to have taken the money out over a period of weeks, withdrawing £200 a time from the cash machine. He then paid all the cash, which was entirely in £20 notes, into his account with firm A.

complaint rejected
When the dispute came to us, Mr D told us he was unable to produce the receipt that firm A had given him when he paid in the money. He said he had not checked it at the time and he had since lost it. However, he said he recalled that some of the £20 notes were not Scottish ones, but old Bank of England notes. These notes had been taken out of circulation shortly before Mr D had made the payment into his account, but Mr D said that firm A had agreed to take them.

We found no discrepancies in firm A's cash records. And although it kept records of any withdrawn notes it accepted, it had no record of the old Bank of England notes Mr D said he had paid in.

When we questioned firm B, it insisted that Mr D could not have obtained the old Bank of England notes from its Scottish cash machines. It said these were filled only with the Scottish notes it issued itself. It also pointed out that it was very unlikely for a cash-machine withdrawal for £200 to consist entirely of £20 notes; such withdrawals almost always included two £10 notes. The machine might occasionally have run out of £10 notes, but this was unlikely to have happened five times.

In the circumstances, it appeared unlikely that Mr D's recollection was correct and we rejected his complaint.

24/9
dispute concerning transaction made four years earlier - firm had no record of customer's account - customer unable to produce relevant documentation

Mrs A's dispute concerned the £10,000 in cash that she claimed to have paid in over the counter four years earlier. The firm told her that it had no record of this transaction and no account in her name.

complaint rejected
When we asked Mrs A how she had obtained the cash, she told us that she had withdrawn some of it from an account with another firm. She said the rest of the money had been a gift from a relative, who had since died. Mrs A was unable to produce any evidence to show she had paid the money in. She told us she had received a receipt, but had lost it later the same day when her handbag was stolen.

When we asked Mrs A why she had waited four years before bringing her complaint to us, she said she had reported the incident to the police at the time but they had decided not to pursue it. She was able to produce documents showing that she had withdrawn £1,000 in cash from an account with another firm. However, she had withdrawn the money a year before she made the alleged deposit. She was unable to produce any documents relating to the rest of the money.

Having looked at all the evidence and information available, we concluded that we were unable to uphold her complaint.

Walter Merricks, chief ombudsman

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.