Martin asked us to investigate after his bank withdrew £6,000 from his account without warning, months after he deposited a customer cheque.
What happened
When garage owner Martin paid in a customer cheque, the bank put the full £6,000 into his account. Nine months later, after doing more work for this customer, the £6,000 was taken back out with no warning or explanation.
Martin contacted his bank, and it told him the funds were removed because the customer’s bank never paid. Martin tried to follow up with the customer, but they’d gone bankrupt. They couldn’t pay their first cheque or cover the work Martin had done since.
Martin complained about the confusion of being credited the funds and then having them taken away. His bank admitted it should’ve told him about the unpaid cheque, and it offered compensation for the stress – but it was less than the £6,000. The bank said it couldn’t be made responsible for the customer’s bankruptcy, so Martin came to us.
What we said
We reviewed the communication between Martin and the bank, as well as the events surrounding the cheque deposit. The bank said the £6,000 initially credited to Martin’s account was internal money that should’ve been replaced by the customer’s bank.
When it wasn’t, Martin’s bank followed up and found out the money hadn’t been sent because two £6,000 requests came in at once.
The customer’s bank assumed one was a duplicate. When Martin found out what was going on, he explained that it wasn’t – the customer owed him two payments of the same amount. But the customer had gone bankrupt by the time this was resolved, so neither cheque could be honoured.
After considering the situation, we found that Martin’s bank should have told him about the duplicate issue when it first spoke to the customer’s bank. If he’d been told earlier, he’d have corrected the confusion and tried to get his money back before the customer was bankrupt. We also agreed that the bank shouldn’t have withdrawn the money nine months later with no explanation.
We upheld Martin’s complaint and said the bank should pay his business the full £6,000. We didn’t ask it to refund the second payment, though, because we didn’t have enough information to prove responsibility. We also agreed compensation for the time and effort he spent resolving the matter.