Pensioner Loses £193,000 Inheritance After Sort Code Blunder

A disabled pensioner has lost £193,000 inheritance after giving out the wrong sort code.

Peter Teich, 74, from Cambridge was withheld his inheritance payment by a bank after he inadvertently gave the wrong sort code.

In an unfortunate turn of events, Teich had mistakenly got one digit wrong on his sort code and Barclays are refusing to refund it because the Barclays’ customer who received his inheritance would not give the bank permission to withdraw the funds.

Mr Teich only discovered his blunder when his sister had already received her share of the estate but he had not.

Less than 12 hours after he realised his huge mistake, he contacted Barclays who advised him that his inheritance bequeathed to him from his late father’s estate would be returned to him in less than a week.

However, it later transpired that the person who received the money, who also resides in Cambridge, is categorically refusing to give it back.

Following the recipient’s refusal, the bank refunded Mr Teich only £25 which was a ‘small token gesture’.

Peter told the Guardian that:

“Barclays insisted that I bear the full and sole responsibility of pursuing their own dishonest customer.”

He added:

“I freely acknowledge my mistake in this unhappy saga: I provided the sort code of the wrong Barclays branch.

“But my error fades into insignificance when considered in the context of Barclays’ conduct.”

Consequently, Mr Teich instructed lawyers and spent £12,000 in legal fees just to get the name of the Barclays’ customer who received the money by mistake.

A battle in the high court followed, which cost a further £34,000 to obtain a freezing injunction before the court finally ordered the other customer to return the inheritance money to the rightful owner.

At first Barclays declined to recompense Mr Teich’s legal fees due to him claiming back his own money. However, the bank finally decided to repay the legal fees in full to the total of £46,000 and an additional £750 in compensation.

Mr Teich retaliated by saying “It could have taken Barclays a few days to recover the misdirected funds, but instead they did nothing.”

The error had come about as banks generally do not marry up account names and bank account numbers, therefore, one wrong digit in a sort code can potentially mean the inheritance could be lost by being sent to the wrong recipient.

The banking sector did stipulate half way through 2019 that they would be implementing name checks in their processes, but this has yet to happen and they are now looking at possibly executing in March 2020.

The implementation of name checks procedures came about to reduce push payment scams (APP), where people are tricked into transferring money to the wrong account.

The BBC reported that £145 million has been stolen in the first 6 months of 2018 alone. Many of the victims have been unable to recoup their money due to current legislation as they are liable for the loss of their money.

In a statement Barclays said:

“It is evident that on this occasion we have failed to meet the high standards that Mr Teich can expect to receive from Barclays, and for this we have offered our sincere apologies.

“After taking a closer look at this situation, we can confirm that Mr Teich can expect the fees he has incurred to be refunded in full with interest, together with a payment for the distress and inconvenience this matter has caused.”

As a probate professional, do you have any checks in place which could have potentially stopped/alerted you to the fact that your clients’ account/sort code were incorrect?