The Case of the Incredible Floating Cheque and Misleading Balance

Nobrow

I brought a sterling cheque to my PTSB for lodgement. Thet said it could take up to 15 working days (IIRC) to be credited to me. Not too long afterwards (4-5 days) my online statement showed the cheque had been lodged ...

Given my balance as it was listed in this statement, I believed my account had sufficient funds to service my standing loan repayments. However when I next checked I saw that the standing order which had been payed out at the start of the month had been returned due to insufficient funds and I had been charged €10 in fees.

The explanation was that the cheque had not been processed yet (despite the fact that the lodgement was reflected in the balance) and that my real balance was insufficient to pay the order.

Some 3-4 weeks later (during which time it was doubtlessly floated by the bank for their profit) the money was made available to me. No apologies were made, the fees I incurred were not refunded, and no mention was made of the damage the missed loan repayment would do to my credit rating.

Does that sound legal??? They lied to me about my balance which was the only reason I had insufficient funds for the loan repayment. Had I know my true balance I would have ensured I had the funds to pay it.

Huggles

Hmm

I am with AIB and if I log a BOI cheque it takes 3-5 workign days to clear, however it is shown online banking that a lodgement has been made. In the totals you see your total when cheque clears then in account view you see real balance.

Chalk it up to experience.

thefinalstage

Huggles wrote: »

Hmm

I am with AIB and if I log a BOI cheque it takes 3-5 workign days to clear, however it is shown online banking that a lodgement has been made. In the totals you see your total when cheque clears then in account view you see real balance.

Chalk it up to experience.

I am with permanent tsb. Exact same deal.

jhegarty

so they told you it would take 3 weeks to clear , and it did.....

what's the issue ?

dudara

Banks often do this. They will change the balance to reflect the incoming lodgement, but will not actually make the funds available until the cheque clears.

You could ask the Financial Regulator about this practice, but from my experience it's pretty standard.

Sam Vimes

it's a very unfortunate thing that happens with cheques. when you put the money in they add the credit to your account but it's not really there until the cheque clears. this fact is used for scams all the time.

here's an example of it working out quite well for someone:
http://query.nytimes.com/gst/fullpage.html?res=990CEED81E3DF933A1575BC0A963958260

jahalpin

All cheques drawn outside the Republic of Ireland are sent, on collection, to the account holding bank in the other country. This can take a long time and until the cheque has been cleared by the bank in the foreign country, the funds are not available to use.

If you required the money in a hurry, taking a cheque drawn outside of ROI wasn't a very good idea. If the other person had transferred the funds electronically the money could be available in your account the next working day, if they were willing to pay for the express service, or within a few days with the normal electronic service.

It is possible to get drafts in England drawn on the Dublin branch or partner of the bank and these will clear much faster than one that is actually drawn in the UK.

The bank has no reason to apologise for the fees etc as you did not have cleared funds in your account with which to pay the standing order. You were told that the cheque could take several weeks to clear, but yet you chose to ignore the information that you were given.. Just so you are aware, if a foreign cheque is returned unpaid to your account, the fees are unbelievable, especially if the cheque is drawn in France. The charges for an unpaid sterling cheque wouldn't be as bad.

IsThatSo?

Its called "uncleared funds" and if they do allow you to draw against it they charge you a tidy sum of interest for the priviledge. Basically the bank does not get value for the funds for x number of days and they do not pass value on to you until they get it. This means that if a cheque does end up bouncing that they do not get caught for it as you have not drawn on the funds.

Its legal and all banks do it.

Nobrow

That's an insane system. What's the reasoning??

Yes they said it could take 3 weeks to clear and that's fine (well not really, but what can we do), but then they mislead me into thinking is had cleared when it hadn't. I had the funds to cover the upcoming DD, but when they "credited" my account I naively believed it to mean I had my money and spent some of it. Had I known my true balance of course I wouldn't have spent it and consequently would not have missed the payment or incurred costs.

Had they told me "Although you may see this amount in your account before then, you may only safely assume it is there after 15 days" then at least it would be clear. To reiterate they told me it "may take up to" 15 days to clear. Those two sentences mean very different things, and whilst there is some comfort in knowing I am not alone, I feel no less agrieved by any of your explanations.

Nobrow

Ire clouds my manners ... Thanks for all the repsonses.

IsThatSo?

Its most likely tucked away in the "definitions" of some customer handbook. This is the kind of thing that people only find out about when it happens to them, so yes, you should have had it explained to you. Would you consider talking to the bank, stating that this was not explained fully (up to three weeks, didn't know that money could be in account but not really be there) and ask for a refund of the fees incurred? Worst they can do is refuse.

IsThatSo?

Nobrow wrote: »

That's an insane system. What's the reasoning??

Cheques bouncing and the money not being there in your account to pay it back if you have spent it.

Not you personally of course, thats just the general explanation for it.

Nobrow

IsThatSo? wrote: »

Its most likely tucked away in the "definitions" of some customer handbook. This is the kind of thing that people only find out about when it happens to them, so yes, you should have had it explained to you. Would you consider talking to the bank, stating that this was not explained fully (up to three weeks, didn't know that money could be in account but not really be there) and ask for a refund of the fees incurred? Worst they can do is refuse.

Mmm, I don't fancy my chances but I'll ask them when I have to take the morning off work to go down and argue that being charged fees for recalling an international transfer which they misdirected is a bit much, given that I presented them with the correct IBAN/Swift info on a printed sheet of paper and told them (twice) that the transfer was to an account in my name ...

Anyone recommend a good bank? Must give PostBank a look ... at least they open on Saturdays!

Pacifico

Nobrow wrote: »

I brought a sterling cheque to my PTSB for lodgement. Thet said it could take up to 15 working days (IIRC) to be credited to me. Not too long afterwards (4-5 days) my online statement showed the cheque had been lodged ...

On Open24 they list both your balance and available balance. The available balance would have shown your balance minus the cheque value, until it clears.

Not the bank's fault you looked at the wrong figure