Bank of England warns of global CHAPS issue hitting bank transfers of large payments that could delay house sales
THE BANK of England (BoE) has issued a warning over a global payments issue which could impact house sales.
The central bank has confirmed it is experiencing problems with CHAPS – the Clearing House Automated Payment System.
CHAPS payments are usually large bank transfers which you have to pay a fee for, for example a home buyer would use it when transferring their deposit.
CHAPS typically processes daily volumes of 200,000 transactions worth £360 billion.
The BoE said the payment issue had been triggered by a global error at Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The global payments issue has not been caused by a hack.
SWIFT has been approached for a comment.
A statement from the BoE said: “A global payments issue is affecting the Bank’s CHAPS service and delaying some high value and time-sensitive payments, including some house purchases.
“We are mindful of the impact this is likely to have and are working closely with a third party supplier, industry and other authorities to resolve the issue as promptly as possible.”
The statement said anyone who uses CHAPS and is concerned about payments being made or received today should contact their bank, building society or payment service provider.
It added that retail payment systems are not impacted so people can continue using cash points, card payments and bank transfers.
Experts said it was not clear how many people have been impacted by the global payments issue but it could affect buyers far and wide.
Chris Barry, director at property law firm Thomas Legal, said the global payments issue would impact completions across the country.
“Whilst many completions are preset and happen earlier in the day, some will still happen between the issue being announced and the cut off of 4pm.
“For many, this has just made an already stressful day even more stressful.
“Most contracts have a 12 or 1pm hard time embedded so if the payment is being made now they are technically in breach of contract.”
The BoE’s website says several thousands financial institutions use CHAPS to make payments.
Some of the banks that use the payments system include Santander, Bank of Scotland, HSBC, TSB and Virgin Money.
Andrew Montlake, managing director at mortgage broker Coreco, said today’s issue had the potential to be a “nightmare scenario” for home buyers.
“The home buying process relies on this system so for any buyers looking to complete, it is worth a call to their conveyancers to make sure all is in order.”
SJ Mortgages addeds lenders usually send house purchase funds to solicitors the day before completion, with Friday the busiest day for transactions meaning the outage today “couldn’t have happened on a worse day”.
The payments issue today comes after the BoE suffered a similar outage in August last year.
The central bank’s Real-Time Gross Settlement (RTGS) service and CHAPS system suffered a “technical issue”, although issues were reportedly resolved within 24 hours.
The RTGS system also suffered an outage in 2014 which was estimated to have delayed the sales of around 700 properties.
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