Banking customers have been issued warnings that any money mistakenly deposited to their current accounts is likely to be charged. Approximately 100 distinct cases of what the banking industry is calling “misapplied credit” are being brought to the Financial Ombudsman Service annually, with a small percentage of rulings ending in favour of banking customers.
From January to March of 2010 the ombudsman was in receipt of nearly 40,000 new complaints in regards to all banking and financial services.
The ombudsman service, which offers assistance free of charge in order to help settle any complains arising between financial business and consumers, has helped in such cases as varied as mortgages to pawnbroking.
Misapplied credit disputes fall under the category of what the ombudsman categorises as current account complaints.
Throughout the 2009-10 fiscal year there were in excess of 24,000 current account-related cases. In the first quarter of this fiscal year alone, there have been over 5,000 additional complaints.
Many people voice complaints about their banks reaching into their chequebooks to take funds back that had mistakenly been added to their current accounts.
Many customers argue that since they were not the ones who erred, they should be entitled to keep the extra money, something the ombudsman seems to very rarely agree with.
Natalie Ceeney, chief Financial Ombudsman, recently commented that real life isn’t like the board game Monopoly, where you get to keep the cash if there’s a bank error in your favour. Ms Ceeney continued, adding that the general view taken by the Ombudsman is that it’s a requirement for customers to return any money inadvertently paid to them.
One notable example of such misapplied credit was when a customer made a£1,000 transfer to his account, but his bank duplicated it, effectively doubling the deposit. Two weeks later, the bank requested the extra funds returned, and the customer, claiming it was the bank’s mistake, refused to return the cash.
The ombudsman ruled in the bank’s favor, but did allow the customer to make the repayment using a 10-instalment payment plan, not subject to any interest rates.
There have been cases when the ombudsman has decided in favour of the customer, however.
One customer’s account was credited by £1,000 shortly after she deposited a cheque for £100. After becoming aware of the error, she spoke directly to a cashier, who told the customer her balance was correct.
Assuming that her expected tax rebate had arrived, the customer took her niece on holiday with the extra money. Four months afterwards she received a demand from her bank for her to return the balance of £900.
As the ombudsman determined that she relied on the cashier and acted in good faith, she was absolved of any responsibility to repay the cash she had spent.