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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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An employee of mine working in the credit control department

Customer Question

An employee of mine working in the credit control department has sent his own personal bank details but with my company name to some of my customers telling them that the company's bank account has changed and asking them to make payments due into his account, what recourse do i have to the bank in question for compensation (return of funds)for clearly not doing their correct due diligence i.e. had the bank done a simple company search they would see that there is already a limited company in the name that he has used to collect money that was due to my company.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
How much money have you lost?
Did you have a banking mandate with the bank?
Kind regards
Customer: replied 3 years ago.

If you re-read my question the account where my customers payments were made to is not my account it is the account of my employee and so I have no information other than account number and sort code but my own company bank account does have a bank mandate

Expert:  Alice H replied 3 years ago.
My name is***** and I'm happy to help with your question today.
Has the employee been prosecuted for fraud? What about the bank - have they conducted any internal investigation? How much is the loss?
Customer: replied 3 years ago.

Hi Alex

I am a little confused, as I am in correspondence with another expert, namely Alex J at Ask the Experts, are you aware?


Alan O'Brien

Expert:  Alice H replied 3 years ago.
Hello Mr O'Brien
I can see that 'Alex J' has "opted out" which means that he is unable to assist you.
I am happy to help. Please let me know.
Alex Hughes
Customer: replied 3 years ago.

of course I am happy for any one to help that is qualified to assist me but I wasn't aware that Alex J had opted out and so I couldn't work out why two people were responding to my question

Expert:  Alice H replied 3 years ago.
No problem!
Has the employee been prosecuted for fraud? What about the bank - have they conducted any internal investigation? How much is the loss?
Customer: replied 3 years ago.

As things stand this matter was discovered this morning the party has accepted guilt and has been dismissed in line with his contract of employment, the police are interviewing the employee tomorrow and the bank are now conducting an internal investigation the loss is unknown but will be around £10k.

My original question was that the employee has had my customers pay into an account that is in his sole name however he has stated to the customers that it is aqua cool limited my company name i want to know if i have a claim against the bank please

Expert:  Alice H replied 3 years ago.
I understand.
There is no automatic claim against the bank. Refunds in fraud cases are discretionary where customers and/or the bank has been hoodwinked by a fraudster.
In your case the bank might pay compensation to losing parties but this will usually be on an ex-gratia basis.
If not discretionary refund is forthcoming your claim against the bank would be for breach of contract / negligence.
To succeed in such a claim you have to prove they owe a duty of care, that they have breached that duty and the breach caused loss.
Proving duty of care towards a customer will be the most straightforward aspect because of the nature of the relationship between you. They have a duty to protect your interests and this extends to protecting you from fraudulent transactions.
However, the hurdle will be that they duty of care was breached. This case involves a fraudster hoodwinking customers and indeed the bank. His actions were undoubtedly criminal.
It could be difficult in the circumstances establishing that the bank should have foreseen the fraud and acted to investigate the change of bank details.
Predicting and acting on every change of this kind is going to be difficult for the bank to deal with. All sorts of bank frauds are committed but this does not mean to say the bank has necessarily been negligent.
Your options are to seek compensation on the discretionary basis. Transactions could be reversed and refund, for example. If not you have a claim against the employee and / or the bank although it could take time for any money to be paid out.
Happy to discuss further.