Can the bank ‘UNCLEAR’ cleared funds?

[Nicola Bell]

Re: Hello Lovely People!

p.s. when the bank sent some copies of recordings they gave the disc the password 'Snowball', I think I can guess why they gave it that name

[des8]

Re: Hello Lovely People!

When and if you proceed against the bank one other arrow you MAY have in your quiver is the Misrepresentation Act 1967.
If you could show you were persuaded to open your account because this was an ethical bank that would honour its terms and conditions (which include the 2.4.6 code and a commitment to stand by their mistakes) and they have failed to do this they would be in breach of that act.
You would have to show the misrepresentation was fraudulent (made knowing or believing it was untrue) or negligent (made carelessly or without grounds for believing it to be true)

I don't see there is any doubt the bank made an error. There T&Cs clearly state the only reason for clawing back the money is fraud. If the incident wasn't fraudulent it could only be by bank error. I would be arguing that by that commitment they waive their reliance on the principle that a party should not profit by the mistake of another.

[Nicola Bell]

Re: Hello Lovely People!

That is an excellent point and I will certainly use it.mashappy: I think the letter will take a bit of a while to compose and I don't have a lot of time at the moment, so I may have to delay that.

In addition, the SARs team from the Co-op rang me today and asked if I had received all the data that I had requested. I told them no and the person seemed fairly genuine in saying that she would therefore re-submit the request for the second call, she said her department does not supply the info directly. She said that it was not in the bank's interest not to provide the information I was entitled to, (there is £35,000 that might suggest otherwise of course) but as she offered to have another try then I will also wait to see if there is any luck with that before going any further. In the first phone call the advisor is clear that the cheque was cleared but in the second phone call the call advisor was absolutley adamant that the cheque was cleared and he had by then spoken to his manager and to the cheque clearing team, this is also why I think this was not a bank error as such.

On the 'bank error' front, I agree that the bank made a very bad mistake but not that it was an error. I found the following some while ago, on Wikipedia I think, and that seems to draw the distinction I think may also apply to this case,

Case; Dextra Bank and Trust Company Ltd v Bank of Jamaica UKPC 50

The bank made a misprediction of what would happen, a prediction is an exercise of judgment and to act on the basis of prediction is to accept risk of disappointment. If you then complain of having been mistaken you are merely asking to be relieved of a risk knowingly run. The safe course for one who does not want to bear the risk of disappointment is to communicate with the recipient of the benefit in advance of fully committing.

Birks – Introduction to the law of restitution p 147

What do you think?

When it cleared the first cheque, the bank must have been fully aware that there were funds in my mother's account and they took the knowing risk of clearing the first cheque anticipating the successful presentation of the second cheque. If both cheques had arrived at the bank at the same time (as the account shows) it does not make sense that the bank would clear one immediately, or that one cheque would be returned unpaid 2 days after the other one, if they had been received by the bank at the same time -as the bank claims - they would presumably have been returned unpaid at the same time?

[des8]

Re: Hello Lovely People!

Has your bank actually told you that they had not passed your mother's first cheque to the paying bank until after you made initial enquiries about the non appearance of funds in your account?
As you say, if they had not presented the cheque but allowed you to draw against it, that would be a commercial decision and not a mistake. But in that case they would probably pursue you for the debt anyway (if you still had the cash), the same way they can pursue an overdraft.
IMO you're probably better off going down the certainty of fate rule, backed by the declaration the cash was yours and don't become involved in the whys and wherefores of the bank.
That's their problem. If you allow them to bring their systems to the table, everyone will be confused and there's no telling how the judge will move.
Court is always a bit of a lottery anyway.

[stevemLS]

Re: Hello Lovely People!

This will not be a small claim, the limit is generally £10k, meaning if/when you lose you will be liable for the banks costs.

My own view is that the balance of the guardian readers got it right when you wrote to them http://www.theguardian.com/money/201...30/coop-cheque

[Nicola Bell]

Re: Hello Lovely People!

hello Des8,
no the bank didn't tell me anything about my mum's cheque, I know they refused to look for it (that's why I think they had it as otherwise presumably they would have tried to find it). I have sent a SARs request to Nat West to see if they can add anything, as presumably at some point the cheque became mine. I agree that I need to keep it simple, the bank is either obliged to follow its T&Cs or not.
I agree if the bank thought this was a debt they could take a court case against me, but what could their case be? They had cleared the funds in line with the rules of the account, what right would they have to the money? They were well aware of all the facts.

Hello StevemLS,
thanks for link to Guardian, I did write to them but didn't know it had appeared as a thread, I will go back to that later in the week when I have more time. Two points though, if I took a small claim it would be for the money that was already cleared in my account that the bank took before applying the overdraft (£9,000 see above), so that would keep it under the £10,000.
Secondly, what is the objection to the bank having to follow its rules? In my view, I cannot be the only person that the bank does this to, it has gone on so long that it must be their routine practice. The rules are there to protect the customer, in my case it would result in a windfall it's true, but it seems a small price for the bank to pay as a penalty when it must be treating all its customers like this. Remember the Coop has not changed its T&Cs to match that of other banks.

[stevemLS]

Re: Hello Lovely People!

In deciding such claims all courts will bring in the principles of equity. Equity is about doing the right thing. One of the maxims is that "He who comes to equity must do so with clean hands" - your's, in my view are filthy.

Regardless of whether you think the claim is for £9k, your cause of action, you say, is for £35k, hence fast track.

[des8]

Re: Hello Lovely People!

"Doing the right thing" also applies to the bank!

[Nicola Bell]

Re: Hello Lovely People!

I'm shocked, why would my hands be 'filthy'?

I don't make the rules and I can't see that I have done anything wrong. I knew nothing about the 6 days before this happened, it was only the bank insisting on it that made me aware, it seemed foolish to me and I told them so. However, I don't see it as a moral issue, I joined the Co-op for ethical reasons and have been with them for over 30 years but they have acted very poorly in this, they have told me that cheques can take up to 12 days before they reach accounts, if you then apply the 6 days it makes a nonsense of the 6 day rules. The 6 day rules are national, european and international standards, all the banks have to rely on them otherwise they don't know their own trading position. Other banks, like Barclays state that the 6 days do not start until the cheque shows on the account but the Co-op does not and has not changed them since this issue arose.

[Nicola Bell]

Re: Hello Lovely People!

hi,
I've looked at the thread, it is on the observer (not the Guardian) website and that is why I didn't see it, I wrote to both these organisations and to Which? Magazine to try to get clarification and advice. The background info on the Observer website is not wholly accurate and it contains a claim that I had not seen before, i.e. that the bank says it was the second cheque that cleared. I was not aware of this, however, presumably for both cheques the 14th would have been day 1 and there is surely no way that a bank would have allowed a 30 year-old account, with no overdraft facility during all of that time (and which would normally not have more than a few hundred pounds in at best) to take this sum out on day 1 unless the funds were cleared. You cannot withdraw funds from a cheque until day 4 unless the bank has cleared them. Certainty of fate is day 6 and that had passed.

[stevemLS]

Re: Hello Lovely People!

I'm shocked that you are shocked.

If this is boiled down to its essence you seek to gain £35k which you absolutely know is not yours and you have no right to it.

It terms of equity, that equals filthy hands.

[Nicola Bell]

Re: Hello Lovely People!

The problem is the rules say that it is mine and I do have a right to it, or do you not think that national, european and international banking standards should apply to me? Do you think all the banking codes, rules, procedures should not apply to me?

If the bank wanted to challenge me for it they could have done what, say the council or the utility suppliers would have to do and take me to court. If the phone company had a dispute with you and just helped themselves from your account to deal with it would that be ethical? The banks have a privileged role but once the cheque is cleared, they have no right to take the funds out.

I will be away until the end of tomorrow but please don't think that a failure to respond represents anything other than no access to the web

[stevemLS]

Re: Hello Lovely People!

There are all sorts of "rules" that say it isn't - google unjust enrichment

[des8]

Re: Hello Lovely People!

Sorry Steve, but your missing the point.
The rules which are referred to are part of the Bank's T&C's, which are imposed by the Bank and are part of the contract the account holder has with the Bank.
It is recognised that as a "rule" one can't profit by another's mistake, but in this case the Bank waived their reliance on this by incorporating that particular clause in the contract.
There is also the problem that the bank withdrew the money they had said was irrevocably the account holder's, thereby putting her into a large "unauthorised" overdraft

I'm also shocked by the tone of your comment about filthy hands, the more so in view of your righteous indignation on Geoffrey's thread "Older people and benefits"

[stevemLS]

Re: Hello Lovely People!

Well, we disagree Des - I was drawing on the maxim of equity that "He who comes to equity must come with clean hands" which I plainly don't think OP does.

I agree to the extent that OP should suffer no detriment as to the unauthorised OD, but that's it.

But, having expressed my view, I'll leave it.

(And the two threads are entirely different, my view here is not based on racial prejudice)