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Hopefully this helps people out. I was just watching a Youtube video that has been recently uploaded about watch scams and this could happen here to.

What is happening is people are paying for the goods by bank transfer and the money appears as cleared funds and they can use them. The goods are then being sent. However, the next day the funds are gone.

The video explains how the people doing the scam are setting up either direct debits or standing orders. And they can on the same business day cancel this to get their funds back. 

This is just to help people that offer same day shipping to get an item sold quickly. The best way to avoid this is by waiting 1 day before sending. 

I dont know if this is common knowledge already but thought id post incase. 

Thanks

I can link video if this doesnt make sense :)

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1 minute ago, kimchi said:

:o

Wow.

The banks are clearly aiding and abetting this scam, shocking, unbelievable.

This is a must watch.

Staggered.

Yeh just thought id post because on here a lot of the time people think the safest way is upfront payment from new member by bt. but obviously this now might not be the case sometimes.

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Yes i got me worried to i was gunna warn on here but checked with Santander. i mean have a look at the bloke in the you tube clip looks a bit of a lad lol. Think the bank said only a company can set up direct debit or something like that. I would be good if someone on  here could confirm this 

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2 hours ago, Goldmick said:

I saw this last week and its not true. I phoned my bank a person cant just set up a direct debit or something like that i did explain the scam and they said its not true 

It does sound ridiculous.

However I 100% do not trust my banks to know what's what or properly advise me (from two very painful and inconvenient/incompetent experiences both in branch and on the phone) so I hope between us we can work out what's going on here with this.

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Direct Debit is instruction to allow a third party to take an amount from your account.  This requires the third party to make the transaction, has fees and generally a business account operation.  A standing order is an instruction to make payment to a third party, they dont need to take any action as it is initiated from the payers side.

So seems quite realistic to do this with standing order, cancelling the order shortly after. It would not be possible with a direct debit.  This is criminals exploiting a loophole intended to protect people.

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As far as I am aware you cannot do this. As @Martlet says it would only in theory be possible with a standing order, not a direct debit. However, the banks will not refund a standing order once made/transferred unless fraud is alleged and an investigation is necessary for this to happen. If you are going to be scamming the last thing you would want to do is to initiate a fraud and even then to do it more than once would be too obvious. You can cancel a standing order but you need to do it in advance of the payment - so that payment would never actually be made.

There is a third point which relates to Continuous Payment Authorities but these have to be set up by the seller (normally only something that is done between loans companies etc.) and this is never going to happen with a PM dealer etc. because they will know a transfer can be blocked and that a refund will be given IF the payment is accidentally taken AFTER the request to block is made.

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If a standing order for a 1st transaction the same day shows as cleared at the other end and the sender cancels before midnight maybe it gets reversed? It would be an interesting test. If you have two current accounts with different backs you could test it yourself. 

Decus et tutamen (an ornament and a safeguard)

YouTube - https://www.youtube.com/channel/UC5OjxoCIsDbMgx7MM_l4CmA

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Just now, MancunianStacker said:

If a standing order for a 1st transaction the same day shows as cleared at the other end and the sender cancels before midnight maybe it gets reversed? It would be an interesting test. If you have two current accounts with different backs you could test it yourself. 

It’s a good point, but the cancellation needs to be notified by 5.30pm the working day prior to the money leaving the account. I believe that once a payment has left the account, the only way to cancel is to state that there was fraud. 

Here is what Barclays advise:

“You can cancel a Direct Debit in Online Banking, in Barclays Mobile Banking,1 in Telephone Banking or in one of our branches. You’ll need to let us know before 5.30pm at least one working day before the payment is due to leave your account. For example, if you want to cancel a payment that's due to be made on Wednesday, you’ll need to cancel it by 5.30pm on Monday.”

 

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5 minutes ago, AndrewSL76 said:

It’s a good point, but the cancellation needs to be notified by 5.30pm the working day prior to the money leaving the account. I believe that once a payment has left the account, the only way to cancel is to state that there was fraud. 

Here is what Barclays advise:

“You can cancel a Direct Debit in Online Banking, in Barclays Mobile Banking,1 in Telephone Banking or in one of our branches. You’ll need to let us know before 5.30pm at least one working day before the payment is due to leave your account. For example, if you want to cancel a payment that's due to be made on Wednesday, you’ll need to cancel it by 5.30pm on Monday.”

 

This is referring to a Direct Debit. I’m pretty sure Direct Debits are safe, they come with a “guarantee” too. Again, companies set up Direct Debits. The guy in the video uses DD and Standing Order interchangeably and there is a difference.

I might try cancelling a Standing Order on my 2nd account on Monday. It won’t work over weekend, it wouldn’t let me send it today.

Decus et tutamen (an ornament and a safeguard)

YouTube - https://www.youtube.com/channel/UC5OjxoCIsDbMgx7MM_l4CmA

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Good point @MancunianStacker But I copied the wrong section!!!! Should have copied this:

You can cancel standing orders any time in Online Banking, if you’re registered. You just need to give us at least one working day’s notice, before 5:30pm on the day before the payment is due to leave your account. For example, if you want to cancel a payment due on Monday, tell us before 5:30pm on Friday.”

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2 minutes ago, AndrewSL76 said:

Good point @MancunianStacker But I copied the wrong section!!!! Should have copied this:

You can cancel standing orders any time in Online Banking, if you’re registered. You just need to give us at least one working day’s notice, before 5:30pm on the day before the payment is due to leave your account. For example, if you want to cancel a payment due on Monday, tell us before 5:30pm on Friday.”

Thanks @AndrewSL76 Still a bit concerning. There might be one bank that will do this???? Barclays may be different to say HSBC on standing orders? Who knows. The whole video may just be a big pile of BS too! 

Decus et tutamen (an ornament and a safeguard)

YouTube - https://www.youtube.com/channel/UC5OjxoCIsDbMgx7MM_l4CmA

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It’s a good point re other banks. If I have some time later on I can do a wee bit of research as this is worrying if it is true.

I presume Barclays follow an industry standard? Perhaps there is something in banking law or policy. I can try and have a look.

In the meantime if anyone knows if their own bank doesn’t follow the ‘industry standard’?

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