Part

BCOBS Banking: Conduct of Business sourcebook

Chapter

Post sale

Printed on: 15/11/2024

Rulebook at: 01/12/2009

BCOBS 5

Post sale

BCOBS 5.1

Post sale requirements

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Service

BCOBS 5.1.1

handbook-rule
A firm must provide a service in relation to a retail banking service which is prompt, efficient and fair to a banking customer and which has regard to any communications or financial promotion made by the firm to the banking customer from time to time.
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BCOBS 5.1.2

handbook-guidance
In determining the order in which to process payment instructions in relation to the retail banking service, a firm must have regard to its obligation to treat banking customers fairly.
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BCOBS 5.1.3

handbook-guidance
To the extent that it relates to a retail banking service, a firm may find it helpful to take account of the British Bankers' Association "A Statement of Principles: Banks and businesses - working together".
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Dealings with customers in financial difficulty

BCOBS 5.1.4

handbook-guidance
Principle 6 requires a firm to pay due regard to the interests of its customers and to treat them fairly. In particular, a firm should deal fairly with a banking customer whom it has reason to believe is in financial difficulty.
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Moving a retail banking service

BCOBS 5.1.5

handbook-rule
A firm must provide a prompt and efficient service to enable a banking customer to move to a retail banking service (including a payment service) provided by another firm.
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BCOBS 5.1.6

handbook-guidance
Where a banking customer wishes to move a retail banking service and there are no arrangements between the firm the banking customer wishes to move from and the firm that the banking customer wishes to move to, the service provided by the former firm will extend only to providing a prompt and efficient service in respect of termination of the retail banking service, for example by closing an account and returning any deposit (with interest as appropriate) to the banking customer.
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BCOBS 5.1.7

handbook-guidance
Where a banking customer wishes to move a retail banking service and there are arrangements between the firm the banking customer wishes to move from and the firm that the banking customer wishes to move to, the service provided by the former firm will include providing a prompt and efficient service in respect of termination of the retail banking service, for example by closing an account, transferring any account balance and making arrangements in respect of any direct debits or standing orders.
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BCOBS 5.1.8

handbook-guidance
A firm may find it helpful to take account of the European Banking Industry Committee Common Principles for Bank Account Switching and the British Bankers' Association/ Building Societies Association/ Tax Incentivised Savings Association Cash ISA Transfers: Guidelines.
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Lost and dormant accounts

BCOBS 5.1.9

handbook-rule

A firm must make appropriate arrangements to enable a banking customer, so far as is possible, to trace and, if appropriate, to have access to a deposit held (or formerly held) in a retail banking service provided by the firm. This applies even if:

  1. (1) the banking customer may not be able to provide the firm with information which is sufficient to identify the retail banking service concerned; or
  2. (2) the banking customer may not have carried out any transactions in relation to that retail banking service for an extended period of time.
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BCOBS 5.1.10

handbook-rule
If a firm participates in the scheme under the Dormant Bank and Building Society Accounts Act 2008, it must inform a banking customer of this fact and provide appropriate information regarding the terms of the scheme on entering into communications with a banking customer regarding a dormant account.
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Firm's liability for unauthorised payments

BCOBS 5.1.11

handbook-rule
  1. (1) Where a banking customer denies having authorised a payment, it is for the firm to prove that the payment was authorised.
  2. (2) Where a payment from a banking customer's account was not authorised by the banking customer, a firm must, within a reasonable period, refund the amount of the unauthorised payment to the banking customer and, where applicable, restore the banking customer's account to the state it would have been in had the unauthorised payment not taken place.
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Banking customer's liability for unauthorised payments

BCOBS 5.1.12

handbook-rule
  1. (1) Subject to (2) and (3), a firm may, in an agreement for a retail banking service, provide for a banking customer to be liable for an amount up to a maximum of £50 for losses in respect of unauthorised payments arising:
    1. (a) from the use of a lost or stolen payment instrument; or
    2. (b) where the banking customer has failed to keep the personalised security features of the payment instrument safe, from the misappropriation of the payment instrument.
  2. (2) A firm may, in an agreement for a retail banking service, provide for a banking customer to be liable for all losses in respect of unauthorised payments:
    1. (a) where a banking customer has acted fraudulently; or
    2. (b) (subject to (3)) where a banking customer has intentionally, or with gross negligence, failed to comply with his or her obligations under the agreement for the retail banking service in relation to the issue or use of the payment instrument or to take all reasonable steps to keep its personalised security features safe.
  3. (3) Except where a banking customer has acted fraudulently, a firm must not, in an agreement for a retail banking service, seek to make a banking customer liable for any losses in respect of unauthorised payments where:
    1. (a) the unauthorised payment arises after the banking customer has notified the firm of the loss, theft, misappropriation or unauthorised use of the payment instrument;
    2. (b) the firm has failed to ensure that appropriate means are available at all times to enable the banking customer to notify it of the loss, theft, misappropriation or unauthorised use of a payment instrument; or
    3. (c) the payment instrument has been used in connection with
      1. (i) a distance contract; or
      2. (ii) a distance selling contract other than an excepted contract.
  4. (4) Except as provided in (1) to (3), a firm must not, in an agreement for a retail banking service, seek to make a banking customer liable for any consequential loss in respect of an unauthorised payment.
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Value date

BCOBS 5.1.13

handbook-rule
  1. (1) The reference date used by a firm for the purpose of calculating interest on funds credited to an account of a banking customer held with it must be no later than:
    1. (a) the business day on which the funds are credited to the account of the firm; or
    2. (b) in the case of cash placed with a firm for credit to a banking customer's account in the same currency as that account, immediately after the firm receives the funds.
  2. (2) Paragraph (1) does not apply to funds credited to a banking customer's account by means of a paper cheque.
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Non-execution or defective execution of payments

BCOBS 5.1.14

handbook-rule
  1. (1) Where a banking customer claims that a payment has not been correctly executed, it is for the firm to prove that the payment was authenticated, accurately recorded, entered in the firm's accounts and not affected by a technical breakdown or some other deficiency.
  2. (2) In paragraph (1) "authenticated" means the use of any procedure by which a firm is able to verify the use of a specific payment instrument, including its personalised security features.
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BCOBS 5.1.15

handbook-rule
  1. (1) Where a payment from an account of a banking customer is executed in accordance with the payment routing information provided in respect of that payment, it shall be treated as correctly executed by each firm involved in executing the payment.
  2. (2) Where incorrect payment routing information has been provided to a firm in respect of a payment:
    1. (a) BCOBS 5.1.16R and BCOBS 5.1.17R do not apply in relation to that payment; and
    2. (b) the firm must make reasonable efforts to recover the funds involved in the transaction.
  3. (3) A firm and a banking customer may agree on a charge for taking the steps referred to in (2)(b). Any such charge must reasonably correspond to the firm's actual costs.
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BCOBS 5.1.16

handbook-rule
  1. (1) Where a banking customer instructs or requests a firm to make a payment from his or her account and the payment is not correctly executed, the firm must, without undue delay:
    1. (a) refund to the banking customer the amount of the non-executed or defective payment; and
    2. (b) where applicable, restore the banking customer's account to the state in which it would have been had the defective payment not taken place;

unless:
    1. (c) the firm can prove that the amount of the payment was received by another firm (referred to in this rule as "firm B") with which the relevant account of the intended recipient is held.
  1. (2) Where (1)(c) applies, firm B must:
    1. (a) immediately make available the amount of the payment to the intended recipient; and
    2. (b) where applicable, credit the corresponding amount to the intended recipient's account.
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BCOBS 5.1.17

handbook-rule

Where:

  1. (1) an instruction or request for a payment to be made from a banking customer's account is given by the intended recipient of that payment to a firm;
  2. (2) that firm can prove that it correctly transmitted the instruction or request to the firm with which the relevant account of the banking customer is held (in this rule referred to as "firm A"); and
  3. (3) the payment is not correctly executed;
firm A must, as appropriate and without undue delay:
  1. (4) refund to that banking customer the amount of the payment; and
  2. (5) restore that banking customer's account to the state in which it would have been had the defective payment not taken place.
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BCOBS 5.1.18

handbook-rule

Where a firm is required to give a refund or take other remedial action under BCOBS 5.1.16R or BCOBS 5.1.17R, it must also refund:

  1. (1) any charges for which a banking customer is responsible; and
  2. (2) any interest which a banking customer must pay;

as a consequence of the non-execution or defective execution of the payment.

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BCOBS 5.1.19

handbook-rule
Where the non-execution or defective execution of a payment by a firm is due to abnormal and unforeseeable circumstances beyond the firm's control, the consequences of which would have been unavoidable despite all efforts to the contrary, BCOBS 5.1.16R to BCOBS 5.1.18R shall not apply with respect to that incorrectly executed payment.
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