Executed payment order despite timely fraud report and revocation

The client became the victim of fraud and, in connection with this, issued a payment order to the bank for an amount of approximately CHF 900. As his account was not funded, he scheduled the payment for a later date. On the same day, the client detected the fraud and informed the bank that the order must not be executed. In addition, he had his card blocked and a new one issued. Despite this report, the payment was executed. The bank initially refused to accept liability and argued that the order had not been scheduled, and the client had reported it too late. The Ombudsman considered the client’s account plausible and pointed out inconsistencies in the bank’s argumentation. Following his request for mediation, the bank reviewed the case again and ultimately fully accommodated the client.

The client had been in a business relationship with the bank for a long time and used its services for payment transactions. He became the victim of fraud, in connection with which he instructed the bank to make a payment order for an amount of approximately CHF 900. As his account did not have the necessary balance at that time, he scheduled the payment for a later date on which he expected an incoming payment.

On the same day, the client realised that he had fallen victim to fraud. He immediately contacted the bank, described the incident, and instructed it not to execute the payment order. At the same time, for security reasons, he arranged for his card to be blocked and ordered a new one, which he received shortly afterwards. From the client’s point of view, it was therefore clear that the payment order had been revoked and could no longer be executed.

Sometime later, the client discovered that the payment had nevertheless been executed. He turned to the bank and demanded a refund. The bank refused this. It took the view that the payment order had not been scheduled but had initially not been executed merely due to insufficient funds. When the coverage arrived, it was executed automatically. The bank also claimed that the client only contacted them at a time when the payment could no longer be stopped. In further correspondence, the bank confirmed its position and referred the client to the payee.

The client did not agree with this response and submitted the case to the Ombudsman. He examined the documents and found that the parties’ accounts differed on essential points. The client was able to prove that he had already contacted the bank on the day the order was placed. The contact at that time was also plausible because the card blocking was documented at that time. The client had received the replacement card ordered during the blocking process a few days before the execution of the payment. From the Ombudsman’s perspective, it appeared plausible that the client had revoked the payment on the day the order was placed and had not only contacted the bank after the execution, as the bank claimed. If the payment instruction had been revoked on the day the order was placed, it could have been cancelled in time, as the execution demonstrably took place only a few days later. The disputed question of timing ultimately did not matter at all.

The bank’s responses did not appear consistently coherent and addressed the client’s arguments only inadequately. It seemed likely that the payment order was forgotten to be deleted in the system and was therefore automatically executed when the expected incoming payment from the client arrived and the payment was thus covered.

The Ombudsman pointed out these issues to the bank and asked it to review the case again and accommodate the client. After re-examining the case, the bank finally fully complied with the client’s request and settled the damage in his favor. The case could thus be closed within the framework of the mediation proceedings.