£10,000 damages claim as bank bungles transfer

30 March 2001

£10,000 damages claim as bank bungles transfer

By Philip Clarke

A BRITISH investor in Poland is claiming £10,000 in damages from his British bank after a catalogue of errors in transferring funds between the two countries.

Gerald Rivett, who is in the throws of developing a farming and conferencing business near Warsaw, requested the transfer of £20,000 from his Royal Bank of Scotland account in Edinburgh to his Polish account on Dec 5 last year.

The money was needed to pay for cattle feed supplied on credit by Cargill Polska and for a staged payment to the local builders who are converting a mansion on his holding into a conference centre.

"Even though payment was not due until mid-January, I wanted the money there well in advance," says Mr Rivett. "Polish business people are very suspicious of foreigners and I wanted to be able to pay them promptly."

Notification that the transfer had taken place was received on Dec 12 from RBS international banking services in Glasgow, as expected.

After spending Christmas in the UK, Mr Rivett returned to Poland in early January to start his farming venture. This consists of 146 milking cows, supported by 1000 acres of cash and fodder crops.

First signs that all was not well came on Jan 16, when Mr Rivett went into Warsaw to review his farm and hotel business plan with his local bank, WBK, a subsidiary of Allied Irish. While there, he attempted to settle his debts with Cargill and the local builder.

"To my horror, the cashier said there was no money in my account," he recalls. "Frantic messages started flying between Scotland and Warsaw, but it was quite clear the money had never arrived."

With the feed supplier and builder breathing down his neck, Mr Rivett asked for an immediate transfer of £20,000, which RBS set in action on Jan 18. Completion was expected within six days.

"By this time I needed more feed, but initially Cargill said no because I had not paid on time before. By the Jan 20 my feed had run out and milk yields were falling fast."

With the help of WBK, Mr Rivett was able to persuade Cargill that the cash would be available by Jan 24 at the latest and another delivery was made.

But, come Jan 24 there was still no sign of the £20,000. Subsequent investigations revealed that RBS had failed to activate the transfer.

"Cargill and the builder were going mental, calling me a liar and a typical cheating foreigner," says Mr Rivett. "When I phoned to say that payment would be another six days we hit rock bottom. The builders walked out and Cargill threatened to send the debt collectors.

"As news of this spread, my other suppliers started to demand cash up front. Daily visits to the cash machine in Grojec just about kept things going, but as the £ had moved 10% against the zloty since Dec 5, I was using cash at 10% less buying power."

The money eventually came through on Feb 5, two months after requested, and Mr Rivett settled his debts.

"The trust I had locally has all but been destroyed," he says. "My dairy cows have suffered, the builder has only returned with half his crew and the project is way behind schedule. I now have to buy everything cash up front and have had to transfer another £15,000 from the UK to fund this.

RBS, which admits mistakes were made, has invited Mr Rivett to submit a record of his losses, while it puts steps in place to prevent the situation recurring. "This is not the level of service I expect my customers to receive," wrote his branch manager, who has launched a full investigation.

Mr Rivett puts his losses at £10,000, both from reduced milk yields and lost business. &#42

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