/ Money

Scam watch: money taken from closed shopping account

We were contacted after an alarmed member of the public had £30 taken from a shopping account they had previously closed. Was it a scam? Here’s what happened.

A member of the public returned a printer and toner they’d bought on Amazon and, after some wrangling, was refunded.

Annoyed, they deleted their Amazon account and data, but two months later, Amazon took £30 from their Nationwide bank account.

They were apoplectic, not just about the possible fraud, but also because Amazon had kept their payment data.

See all the scams we’ve covered on Which? Conversation

Amazon didn’t help, so they turned to Nationwide for a refund. It refused, but did offer £50 compensation for ‘service issues’ when reporting the payment.

Following this, they complained to the Financial Ombudsman Service, and it ordered a further £100 in compensation and said Nationwide could have done more to help.

They still hadn’t been refunded the original £30, and went on to report Amazon Europe to the regulator.

What happened here?

The £30 debit wasn’t fraudulent but was an error by Amazon.

It assured us it had ‘initiated account closure and deletion as soon as instructed’, but says it keeps some data for ‘legal and accounting purposes after this time and makes this clear during the account deletion process.

Clearly, though, that was news to the customer. The regulator might consider that if it looks into the report.

Retained payment data was used to debit a customer’s bank incorrectly. Following our involvement, Amazon finally refunded the customer.

Nationwide told us:

“As soon as our customer alerted us to the issue we acted to protect their account. However, we accepted our service on their initial calls could have been better, for which we apologise”

Have you ever had money taken from a closed account? How did your bank deal with the situation?

Comments

When I first gave my credit card details to a mail order company (the internet had not been invented) I wondered about the risk that further payments could be taken without my authorisation. Many years later, despite never having had a problem, the concern remains. What I had been concerned about was fraudulent payments, and I had not thought much about the possibility of mistakes.

After having no success with either the retailer or the bank it’s good to hear that the Which? member pursued the matter rather than just writing off the £30, as many might have done.

Thanks for the story, Faye. I hope this is an isolated example, otherwise it might be good to publish the story in the magazine.

See page 63 of the May issue 😉

Grrrr. That’s twice you have caught me out recently, George. My magazine reading is still in lockdown.

Haha, no worries. We always publish the scam watch and legal advice columns from the mag. Sometimes there are others we can include here too, depending on if they’ll work online.

If you ever spot anything in the mag you’d like to discuss here then give me a shout – I can always see if we can repurpose it.

Thanks George. I’m impressed that despite the coronavirus problems the new Convos keep coming and that the Legal team are continuing to drop in and carry advice. The July issue has a short article about DAB radio and the change in our listening habits, resulting in the decline in sales of conventional radios. It’s a long time since we had a new Convo about radio.

Is that the one by George Thompson? If so I was thinking that could work for us too, so I’ll drop him a line.

Really glad that the new topics haven’t gone unnoticed – this really is the busiest I have ever been! Unfortunately we may be seeing a little less of the legal team for a few weeks as they’ve been absolutely inundated with queries on the phones, but we’ll have them back as soon as they can make time.

Yes, that’s the one. I have not managed to find out if the BBC is going to move from DAB to DAB+, since I have two radios that generally stay tuned to Radio 4. There’s no hurry.

It’s always a shame when Convos attract no comments, like the one on mental health.

Anthony Plant says:
26 June 2020

A problem with checking a credit card statement is that a company detailed as payee can often be different from the one from whom the purchase was made. This is particularly so when the seller is one of a number within an overall organisation which has a central accounting department. It’s particularly difficult if the sum involved is a round number – it can be difficult to determine whether an entry for, say, £100 being paid to a company you have never heard of located in a place you have never visited is a valid payment or a scam.

I have usually been advised when making a credit card purchase what name will show on my statement. It has never been a problem except many years ago I did not recognise a name. I referred it to the credit card company to clarify who the payment was made to. They simply refunded me with no explanation.

I have always found Nationwide to be very helpful when reporting suspect payments. I wonder, sometimes, whether banks make a “goodwill” payment as an easy way of placating a customer. Our money of course. Some years ago we had a problem with a little used account with another bank that took a week or two to resolve. Without asking us the bank put £100 in our main account as a goodwill gesture to say sorry. We didn’t ask for that, did not set out to seek compensation, and didn’t deserve it but giving away their depositors’ money seems too prevalent.
Without knowing all the details here, it seems to me that giving the customer five times their original loss, and then getting the original £30 refunded, is excessive to say the least. and it was Amazon who should (also) have been providing compensation.
Double spacing back when I edit.

The only mistake I can bring to mind was when I received my bank statement and found that I was in the red. The monthly mortgage payment had been changed and due to a mistake I payed both the original and the new amount. 🙂 I contacted the bank, received an apology and the interest charges were refunded promptly. I did not claim compensation and it was not offered. I’m happy to tolerate the occasional mistake as long as a company (or other organisation) takes action to prevent a recurrence of the same problem.

In the present case the member had tried to sort out the problem with Amazon and then with Nationwide, and finally had to go to the ombudsman. I don’t know about the rights and wrongs of compensation but I’m very strongly in favour of empowering consumers to take action when mistakes occur.

Malcolm – Try clearing the cache.

I experienced a similar problem last year after cancelling the Microsoft Office 365 annual email renewal notice.

I emailed Microsoft within the time allocated and wrote to my bank to this effect in order to stop the payment, but £79.00 was still taken from my credit card account. I ‘phoned the bank but lost count of the number of transfers and different people I spoke to, each one failing to explain which branch, or who I was actually through to.

Finally in desperation after enquiring whether, in fact, they were situated on this planet or on the moon, they informed me I was through to the appropriate credit card dept. I reminded them that if the situation was reversed and I had gone overdrawn £79.00 I would have been charged a hefty fine!

They eventually agreed to refund the £79.00 but why, oh why, do they make the complaints procedure so difficult?

David Pilgrim says:
24 June 2020

I cannot for the life of me understand why Amazon is so popular, frequently a little extra searching will find the same item cheaper elsewhere and in any case I hate to see such a huge monopoly being developed, especially as Amazon was built over several years on the profits of unpaid tax.
Worse, I hate the fact that ‘Which’, supposedly the consumers champion, is affiliated to Amazon and receives payment for every referral from the website. I think at least it should advertise that fact more openly!

One reason why Amazon is ‘so popular’ is its outstanding customer service. I have been forced to use specialist suppliers for certain items in the recent past, and the service levels vary so widely and are often so dreadful when compared with Amazon that my first port of call, if I need small items delivered quickly, is always Amazon.

It’s outstanding customer service has been brought into question by recent Convo commenters. Far more important is its ability to deliver quickly and efficiently all those fake, unsafe and life-threatening product it promotes and profits from to unsuspecting customers. Quite outstanding. 🙂

I dont know why it is popular for others but for me its the simple fact that in many cases I simply cannot find, after extensive searching, the item I am looking anywhere else or I cannot find it cheaper (online or shops) and thats taking into account delivery costs.

The money taken by Amazon from the Nationwide account was presumably taken by Direct Debit. The Direct Debit Guarantee says “If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society”. Why did Nationaiwde not simply refund the £30 under the terms of this guarantee? In my experience, however, this guarantee is ignored by all banks.

London Consumer says:
26 June 2020

Not applicable, this would have been a card transaction.

It’s a bit misleading to write “Amazon took £30 from their Nationwide bank account“. This suggests that Amazon had their bank account number and sort code, e.g. a direct debit. What I suspect is more likely is that Amazon charged their debit card, which happened to be linked to a Nationwide bank account. Card payments, whether debit card or credit card, are governed by very different rules from direct access to a bank account. Therefore it would have been more accurate to write “Amazon charged £30 to their Nationwide debit card“.

In the May magazine which carried this story we are told, in response to a member’s communication:

“Retained payment data was used to debit your bank incorrectly, Following our involvement, Amazon finally refunded you. Nationwide told us: ‘As soon as our customer alerted us to the issue we acted to protect his accounts. However we accepted our service on his initial calls could have been better, for which we apologise.”

So by what means did Amazon debit the customer’s account? By direct debit? There’s no mention of any debit card having been used, but I don’t believe that Amazon supports direct debits.

Perhaps Faye, who authored this Convo and the magazine article, could give us some more details, without which we are left guessing.

Dennis says:
26 June 2020

I also had problems with Amazon they were not very helpful
got the money back from the bank
Had to change my card details because they hung on to the details from the other card
never use amazon again

Yvonne Webster says:
26 June 2020

As a one off I bought X box Microsoft Gold for a month for my son. This was via my mobile phone. However a year later and money has been added to my phone bill, even there is now no Xbox. I have contacted Microsoft and it appears it has been sorted their end. The money is being added to my phone bill through a service called Payforit. 3 mobile network states there is a number for Payforit on my bill, however there isn’t. Apparently most other networks have stopped using this service as it is a sort of scam. Does anyone have any ideas how to contact Payforit and has this happened to them?
Tried phoning the 3 network but they are based in India and didn’t know what I was talking about.

Nicholas Pye-Smith says:
26 June 2020

Yesterday I was making a purchase on Amazon and an option to join Amazon Prime was presented. I’m sure I did not select it but soon afterwards I was welcomed to my 30 day free trial of Prime. I’m not a frequent user of Amazon so I’m not interested in paying for Prime (when the trial period ends) so I tried to cancel it. I found it very difficult to find my way through many pages on the web site to one where I could cancel my Prime membership, but eventually did so. I then deleted my credit card details from my Amazon account but was informed that they would be retained for use on any outstanding purchases. This episode has made me unwilling to use Amazon in the future.

lorna says:
26 June 2020

If the account was closed then the £30 should have been rejected and not paid, so maybe Amazon were at fault, but more at fault is the Nationwide for not carrying out account closure procedures correctly. I worked for a bank for years, and the “file maintenance” is a daily procedure, checked, double checked and finalised within 24 hours. If this account was still live then that is the issue. The debit card issue is a red herring, because that link should have been severed as well

lorna says:
26 June 2020

sorry, just re read and realised it was the Amazon account they deleted, anyway, you all know now that Banks can`t debit to a closed account……

Ned Ryder says:
26 June 2020

A very poorly written article with an incorrect headline. I read it because of the novel and interesting problem of money having been debited from a closed account, as stated in the headline. From reading the article that doesn’t seem to be what happened at all – money was debited by Amazon from an open bank account and their reason for doing so was apparently something to do with a closed Amazon account, an entirely different situation.

With that out of the way we are then told that Amazon took £30 from their bank account. How? By what authority? Direct debit, debit card without customer presence, something else? Details matter in this situation as the requirements and obligations differ in each case.

Although it doesn’t matter much, we’re never given any clue about why Amazon did it. It would be interesting to know so we can judge how likely they are to do it to other people.

If you give your full debit card details to someone then they can debit unlimited money from your account whenever they feel like it in the future, be it validly, accidentally, or fraudulently. That’s a risk you take when you give out the details.

Ned, you make some very good points. I found this article to be very confusing, and cited only one of its problems above. The article needs to be rewritten to give the relevant facts, many of which are missing.

When closing an online account you need to inform your bank, preferably in writing, at the same time to stop any further payments from your account being made to a particular named person or company.

The above article does not make it very clear when the first contact with Nationwide was made. It would appear first contact with Nationwide was made after Amazons refusal to cooperate, which is leaving it a bit late. Once your bank has been requested by you to block any further payments to a specific named closed account, then your bank is liable for not complying with your wishes if they fail to do so.

Banks are entrusted with your personal financial and monetary affairs and should not continue to pay out direct debits or any other money from your account without your permission providing you have given them immediate notice to block any further transactions being made between you and the named offender.

If, as I suspect in this case, no contact was made with Nationwide until after Amazons refusal to cooperate, then the bank would have, quite rightly in my opinion, sanctioned the £30 payment to Amazon. If, on the other hand, notice to stop payment was administered at the exact same time of the Amazon account closure, then the bank were at fault for ignoring your request to do so.

Beryl, Amazon doesn’t even support direct debit. As I mentioned above, this article is worded in a very misleading way, because it falsely suggests that Amazon had access to the customer’s Nationwide bank account. Amazon accepts payments by credit card and debit card. How those credit cards or debit cards are funded is irrelevant to the story, so the article should not even have mentioned a “bank account“. Clearly the article misled you as much as it misled the rest of us.

NFH, I don’t quite understand how or why the question of DD entered the fray. There is no mention of DD in Fayes article. This is a classic example of a very big ‘storm in a teacup’.

Clearly, Amazon helped themselves to £30 via a customers card details, which had been entrusted to them, after the account had been closed without their knowledge Whether their ‘data for legal and accounting purposes’ was justified or may have been written in their T&C’s and entitled them to do so is a different issue.

The salient point here is, Nationwide were evidently unaware their customers Amazon account had been closed, therefore they sanctioned the transaction. If they had received notification from the customer to this effect the outcome might have been very different,

As is often the case it’s usually the customer who bears the brunt in these unfortunate situations, but if people don’t complain, nothing ever changes.

As far as I can see the issue is that a few people read the word ‘account’ and assumed bank account, rather than Amazon account – is that correct?

A good point and feasible.

Yes, George – it was not made clear that it was an Amazon account that had been closed by the customer and not their bank account.

Another point of confusion arising from the article is that it says, right at the top, “We were contacted after an alarmed member of the public had £30 debited from an account they had previously closed.” The word “debited” – rather than “taken” as used in the headline – gave the wrong impression of the form of payment.

Some readers also thought it was a Which? member who had been affected rather than a member of the public – not that that makes any difference or is important in itself, but it goes to show how carefully these pieces have be drafted and presented since people don’t always read the Intro but react to what previous commenters have already inferred or misinterpreted thus compounding the misunderstandings.

I’ll make a couple of very subtle changes. As you know, these pieces come directly from the magazine which is why they may feel shorter sometimes (due to the more limited physical page space).

I am still left wondering why it was felt appropriate for Nationwide to give the customer £150 – 5 times the amount in question – when the problem seemed to be with Amazon. I’d have thought they should have been making any goodwill payments. But maybe I am confused by what seems to be a confused report.

George, it’s more than subtle changes that are needed. Amazon has no means to take money from a customer’s bank account, yet the article suggests that it has. Amazon has means only to charge a credit card or debit card. The way in which such a card is funded is irrelevant to the story. The story neglects to mention at any point that this is about a card transaction, which is an extremely relevant point, if true.

Malcolm, it’s very common for the Financial Ombudsman to award £150 in respect of poor service by a financial firm, even if there was £0 financial loss. The banks know this, which is why they often offer £150 to compensate for their poor service. The £150 relates to poor service, and is unrelated to the amount of any transaction.

I received only £50 when Nationwide admitted that they had mucked-up a standing order payment about a year ago! Should I feel aggrieved? I didn’t ask for anything and wasn’t expecting anything, but saw it as a standard token for my time and trouble in assisting with regularisation of their system.

If a complaint goes all the way through to the FOS a more substantial amount is probably justified because that would indicate resistance at the first stage.

The financial services industry does seem to be more liberal with our money than other commercial enterprises, however. An infliction of personal pain in an appropriate part might have a more corrective effect!

George Tardios says:
1 July 2020

EasyJet cancelled our fight to Cyprus because of the Virus. My wife and myself, for a total of £226.96.
Then they sent another email saying we would not be getting a refund of £226.96 spent on flights, yet I’ve also got an email sent much earlier stating
“We are working hard to process your refund request as quickly as possible.” And that I would receive my refund “within 28 days following submission.” Apart from wanting my monies spent, I am somewhat confused. Can you help?

It’s fundamental. When your bank account is debited, it means money is taken out of the account, which, in this case, Amazon clearly did, after their customer had closed the Amazon account. The opposite of a debit is a credit, in which case money is added to your account.

Lessons learned from this saga is:: As soon as you decide to close any online account that has access to your credit/debit card details Tell your bank, preferably in writing, immediately. The onus is then on the bank to comply with your instructions.

Nationwide is well known for its loyalty to its customers and will often offer a ‘goodwill financial reward’ to placate their angst when such incidents arise.

Beryl – It has been recognised that “debited” was the wrong word in this context and it has since been replaced with “taken”.

As a loyal Nationwide customer I feel their initial offer of £50 for a minor service delivery problem was sufficient and that no appeal to the Financial Ombudsman was justified [adding £100 to the penalty].

As a loyal Which? subscriber I question whether its support for promoting the ‘compensation culture’ in the way illustrated in this case is justified.

On top of the money paid out with little justification, this case has taken up unnecessary time and effort in Nationwide, the Financial Ombudsman Service, and Which?

If anybody should be penalised it is Amazon for their intransigence in wrangling over a refund but all they have had to do is honour their legal obligation [and probably resell some returned products].

John, in the real world mistakes do sometimes occur, and when they do, someone is usually expected to take responsibility for it/them. We don’t know the full story in this case and the reason for Amazons original refusal to refund the return of goods.

When Microsoft sent a 14 day notification that my continuous annual renewal payment was due I emailed to say I would not be renewing, but despite this they still went ahead and debited (took) money from my bank account via my credit card.

What they didn’t realise however, was that I had already written to my bank to stop the payment, but the bank failed to do this, so they had to accept responsibility for the error. I have no idea whether the bank took the matter up with Microsoft or not, but as far as I was concerned that was the end of my problem.

I was of the opinion that most people who read these debates on Which?Convo were adult and intelligent and had no need to be told debiting and taking money from an account was exactly the same thing, but it seems on this occasion I was wrong.

For my part, I have understood the reasoning behind Fayes article and still fail to comprehend what all the fuss is about. 🙂

Beryl, there is a huge difference between taking money from a bank account (which can be done only by direct debit) and charging a debit card or credit card (the funding of which is irrelevant). Direct debits are governed by very different rules from card transactions.

If one states that a business is taking money from a bank account, then it implies that the business knows that it is taking money from a bank account, which can only mean a direct debit. If the business is charging a card, then they don’t know whether or not there is a bank account behind the card, which is irrelevant anyway. Even if the business can identify the card as a debit card, they still don’t know that there is a bank account behind the card, because it could for example be Curve. I use Curve, a debit card, with an underlying credit card in order to earn points etc. I do this when paying HMRC, buying Premium Bonds and even when paying off another credit card.

Beryl – At the risk of prolonging this strange discussion, occasioned by a lack of clarity in the original article, I feel I must ask how Microsoft “took money from your bank account via your credit card”. I might be making too many presumptions, but this is as I see it –

You had presumably given Microsoft a Continuing Payment Authority to use your credit card to collect your annual service charges and they had ignored [or decided not to act upon] your revocation of your payment authority. It had been charged to your credit card and presumably your credit card issuer has a direct debit authority from you to collect the balance due from your bank account each month.

But how would your bank have known that there was a payment to Microsoft within your credit card balance? Even if your credit card is a product of your own bank, there is no correlation between the administration of your current account and the operation of your credit card.

Moreover, well before any direct debit payment is executed to clear the balance on your credit card, you will receive a statement from the credit card issuer identifying all the charges included for that month; this provides an opportunity to check them and deal with any errors or discrepancies by revoking the direct debit authority or by giving appropriate instructions.

I am at a loss to see, therefore, how your bank was at fault in paying your credit card bill when the direct debit was presented for collection of the payment.

Your bank might have been remiss in not querying your instruction not to make a payment to Microsoft but that is the only aspect of their conduct that I would question.

Luckily I suppose, I’ve never had any problems getting refunds through Amazon, for returned goods.

It is a major problem returning goods to Amazon if you don’t have a printer.

Not if you have a smart ‘phone, however. They send a QR code which the Post office can scan. They then print the label.

It’s a brilliant solution for the majority who have smartphones. Of course, many older people don’t have them: https://www.statista.com/statistics/271851/smartphone-owners-in-the-united-kingdom-uk-by-age/ Maybe they don’t make much use of Amazon either.

QR codes are so useful, yet are not used to their potential. Maplin used to use them on shelf labels so that you could check the specifications of products on display.

Not much use when you are self-isolating.

steve says:
29 June 2020

Many years ago i had an account with the co-op bank after a couple of issues with them i closed my account giving them the cheque book and the cards.3 years later they sent me a bill for £19.99 giving me 7 days to pay for them paying an old direct debit to a firm that i had no dealings with for years.
I sent them back a letter saying that they now owe me £25 for my time and i would start court action if within 7 days i did not receive a cheque for the £25.two days later a letter of apology from them saying we will not pursue the £19.99.I never got the £25.So why do banks and firms think that everyone will roll over for them as i for one will never.