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Bank Charges and How this old banking stuff work?

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  • Bank Charges and How this old banking stuff work?

    PLEASE READ THE INTRODUCTION FIRST


    I am not even sure why I am writing an introduction but experience tells me that someone will pick a word or two from what is written and assume it is inspired by them or because of their story. This piece is one which was inspired from a number of things that I read across charging sites and I think is common themes running through them. I can explain them and am not looking to justify the why and the wherefore because that has already been discussed at length on ALL charging sites. I do hope to explain things and my perspective is as an employee of one of the Big Four banks. If you want to know the why is it this long or that long, then that is not what the piece is about. Informing someone how a system works enables them to take control or see why the system took control of them. When all is said and done I hope the piece allows you to avoid charges should you have them or advise others about charges. This is not an exhuative piece but feel free to ask questions and I will try and update this with other things in about a months time.

    Working Days

    This is what makes the Bank work and will explain a lot of things as I go through them. The basics is that it is Monday to Friday excluding Saturday and Sunday. The Banks usually state that the funds needs to be in the account the working day prior to the item going out, ie Friday for Monday, Monday for Tuesday, etc,etc,.

    Direct Debits

    This is an agreement between yourself and a company to pay a bill directly from your account usually at an agreed time. You have the right to cancel the Direct Debit. At the bank any Direct Debit that you cancel can be reinstated by yourself providing it is within 90 days of its cancellation.

    Standing Orders

    This is a fixed amount payable to a company or individual in which you yourself determine the amount. It can be set up for a minimum 2 payments and there is no maximum. The Standing Order can be amended providing at least two Working Days notice is given. It can be cancelled with the same criteria. A standing Order takes 3 working days to reach its destination unless the other account is at the account holding branch where it will clear overnight.

    Debit Card transactions

    This is where you pay a provider either online/over the phone or at a shop for goods. The transaction should be collected within 3 working days of the payment amount, however i have know it to take up to three months to debit an account(although this is not the norm). This is the most difficult to write becuase there are so many anomalies that could occur. I have read that all solo card transactions are checked, but yet the reality is that supermarkets operate floor limits and transactions are authorised automatically without any checks being made apart from the correct pin number. There is a way of automatically authorising a transaction with the terminals themselves by pressing a button.
    With regards to refunds onto cards, the retailer has up to 21 days to put the transaction through even if there is a gap of only minutes between the debit and refund.
    There is cases of what is called 'ghost' transactions. That means that the company has appeared to debit the account and yet the money reappears in your account. This means that the transaction has not been done properly and usually will mean it being debited a few days afterwards.
    There is cases of transactions being authorised but the individual being told it has been declined. There is a third party in this transaction which is the merchant. Transactions authorised usually will drop off the system within 3 working days as that is the timescale they have to process the authorisation code.

    Cut Off Times For Internet Banking

    I did get bored looking at this one but the cut off point for banks payments as standard is around 7pm which means that rather than taking three Working Days it will take four instead. Transfers between accounts will go through straight away although banks have written in their terms and conditions that payments made prior to 3:30pm will determine if Direct Debits/Standing Orders or cheques will be paid the following day.


    Cheque clearing and the reality

    Cheque clearing is a controversial topic because there is the cheques clearing outwards and inwards. I will explain this. When you pay a cheque into your account it takes 3 working days to clear a cheque. This means it is processed and then is received by the other bank on the third working day. However, the cheque can be returned on day 4 and day 5. That means when you ask a cashier when the cheque will clear they will tell you 5 working days. The funds are available to draw from the ATM after day 4 and it is unusual that the cheque is returned. That is the basics of cheque clearing when paid in. What happens though when you give someone else a cheque? Well, the cheque is paid over the counter and can be debited as early as the third working day.
    THE EXCEPTION: If a cheque is cleared in house which effectively means that a cheque drawn by an account holder of the same bank and paid into that bank will clear overnight. So for example, you have an account with Birmingham A branch and the account holder is Birmingham A branch and the cheque is paid in at Birmingham A branch, it will clear overnight.
    Special Clearance DOES not clear the cheque quicker, merely tells you if it would be paid. Bankers Drafts do not clear any quicker and are the same as normal cheques except they are guaranteed to clear. Building society cheques are the same as well. Please note that BANK DRAFT fraud can be common as well so if in doubt pay for SPECIAL CLEARANCE

    Transfers during the weekend

    Transfers made during the weekend are shown immediately on the balance but when you receive the statement it shows that it was made on the Monday, why? Well, if you have seen the Working Days piece at the beginning of this article it is explained that Saturday and Sunday are not counted as working days. So it will go through straight away but it will show that it was made on the Monday, that is the same for online transfers made after the cut off points, it will show the following day.

    Cash paid in during the weekend

    This will have no impact on any items due to go out over the Saturday Sunday or Monday.

    I am sure I have not covered ever aspect so feel free to ask further questions as i will try and do a follow up article next month to cover all aspects raised.

  • #2
    Re: Bank Charges and How this old banking stuff work?

    I would love to update this article but no one wants to ask more questions? I am shocked already.. when I posted the article I thought i would need to spend a good week making sure I updated it all, seems like maybe I did a better job that I thought

    Comment


    • #3
      Re: Bank Charges and How this old banking stuff work?

      Lol nattie, you obviously did.

      Comment


      • #4
        Re: Bank Charges and How this old banking stuff work?

        i give in with you nice lot.

        Comment


        • #5
          Re: Bank Charges and How this old banking stuff work?

          is this article above explanatory of all bank transactions? Has this article shown you how the charges could(and I use this softly) have been avoided and if it does, is that why it is quiet on a lot of the forums??
          Sounds like Angela Knight has been right all along maybe

          Comment


          • #6
            Re: Bank Charges and How this old banking stuff work?

            Nattie

            Don't follow this bit--Lets assume we are talking about using internet to pay a bill like Telephone account (say)

            Cut Off Times For Internet Banking

            I did get bored looking at this one but the cut off point for banks payments as standard is around 7pm which means that rather than taking three Working Days it will take
            four instead


            I assumed,therefore the transfer to the tel companys account in another bank would be immediate

            Turbo

            Comment


            • #7
              Re: Bank Charges and How this old banking stuff work?

              :sleep:

              Comment


              • #8
                Re: Bank Charges and How this old banking stuff work?

                it isn't

                Comment


                • #9
                  Re: Bank Charges and How this old banking stuff work?

                  Hi,

                  I realise this is an old thread but the following may be relevant. I am informed today by Santander that they do not make any decisions about whether to pay a DD. If it is on your account, when it is claimed they will pay it, simple as that no questions no enquiry no interest (Ha Ha). The decision to take the money is entirely in the hands of the collecting company and to monutor this they have something called a "floor limit" which means that if the requested DD is under the floor limit and there is no money in the account they will simply take the money and leave you to deal with the consequences (i.e. charges) or if the amount claimed is over their limit they do not take the money but you will STILL be charged by the bank for having a DD fail!

                  Question - IS THIS TRUE?

                  If so, anyone you give a DD mandate to is now making LENDING decisions on your bank account. By the way the Santander complaints department guy Called Danniel ( very scouse accent) told me lots of people complain about this, and as a result of working in Santander he does not and WILL not have a DD on his own personal account at any price!!

                  Comment


                  • #10
                    Re: Bank Charges and How this old banking stuff work?

                    Originally posted by Interalia View Post
                    Hi,

                    I realise this is an old thread but the following may be relevant. I am informed today by Santander that they do not make any decisions about whether to pay a DD. If it is on your account, when it is claimed they will pay it, simple as that no questions no enquiry no interest (Ha Ha). The decision to take the money is entirely in the hands of the collecting company and to monutor this they have something called a "floor limit" which means that if the requested DD is under the floor limit and there is no money in the account they will simply take the money and leave you to deal with the consequences (i.e. charges) or if the amount claimed is over their limit they do not take the money but you will STILL be charged by the bank for having a DD fail!

                    Question - IS THIS TRUE?

                    If so, anyone you give a DD mandate to is now making LENDING decisions on your bank account. By the way the Santander complaints department guy Called Danniel ( very scouse accent) told me lots of people complain about this, and as a result of working in Santander he does not and WILL not have a DD on his own personal account at any price!!
                    Hi Interalia,

                    Yes this is quite spot on. The bank won't deal with any of your payments as such, they are requested by service providers, and either paid, or you get charged.

                    The Direct Debit guarantee is worthless. If an error occurs, you will have to get an admission from the collector firm, in writing, stating the error before your bank will refund any money or charges. Having been in that position I can tell you such letters don't happen.

                    These are the reasons why I use DD only when I have no other choice, and for a small amount. Everything else is either paid on invoice, charged to my card, or paid directly by cash.

                    Direct Debits can be incredibly slippery, take care

                    Comment

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