Can the bank ‘UNCLEAR’ cleared funds?

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Telling you funds were cleared when they were not was certainly an error.
The Coop only allow account holders to draw against cheques on the fourth day after deposit with them, so allowing you to draw on day 2 is also a mistake.

http://www.co-operativebank.co.uk/cu...clearing-cycle

T = Transaction day	The day a cheque deposit will appear as a credit on your account.
T + 2 = Transaction day plus 2 clearing days	The day you will start to earn interest on a cheque deposit. Or, the day the value of the cheque deposit will start to reduce the interest charged on your overdraft.
T + 4 = Transaction day plus 4 clearing days	The day you can withdraw against the cheque deposit in your current account. Until ‘certainty of fate' is reached a cheque can still be returned unpaid and the deposit removed from your account.
T + 6 = Transaction day plus 6 clearing days	The day you can withdraw against the cheque deposit in your savings/ deposit account.
T + 6 = Transaction day plus 6 clearing days	The day the cheque deposit receives ‘certainty of fate' and can no longer be debited from your account without your permission.
Cheques deposited after 4:30 or via the Post Office will be subject to one day's delay. For postal deposits, T is the day the cheque is received by the financial institution and credited to the account.

I think the bank made errors and tried to cover them by stretching the facts.

Your bank account shows you withdrawing £35000 on 17 Dec, which of course is pass the certainty of fate date for the first cheque using the chart above which allows 1 day delay for deposits via Post Office.
There is no way it can be said to be drawing against the second cheque which is shown on the account as a deposit on 14 DEC ie one working day prior to the drawing made on 17 Dec

At the end of the day however I think you will be lucky if you win
I admire your persistence, and think you have been misled by the bank, but finally the courts will probably/possibly say you cannot profit from a mistake and find against you.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hello Des8,

ok, so, following the mistake line, what was the actual mistake?

The bank says that they made a mistake, however they do not actually say what the mistake was. The bank suggests that the mistake was made in telling me the funds were cleared when they were not. However, they also suggest that they did not get the cheque until the Friday, in which case how could I withdraw the funds the following day on what was apparently day 2 of the clearing cycle?

NB

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

err no.
Other logical explanation is that bank made a mistake, but they are not prepared to stand by it

Certainly from the information presented to you in your account statement, and the conversation you had with the bank on day 7, you were reassured that the money was yours.
The bank however had "got it wrong": your account was incorrectly marked as "cleared funds" and you were given incorrect information.
Many years ago, in the time prehistory, banks and insurance companies etc tended to honour what they had said, even to their immediate detriment, but no longer I regret.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello Des8,

I think I crossed that madness line some time back :tinysmile_twink_t2:, hopefully it is circular and there is hope for me to cross back again.

Thanks for your response, I am surprised (but of course, pleased) by your interest and patience in sticking with this.

I agree with you that the call adviser would not have the power to agree an overdraft of this size, but neither would any sane bank given the usual state of my finances.

To answer your question, there was no mention of an overdraft at the time. On the Friday (day 7), I was told that the funds were cleared, the bank has failed to provide the most revealing of the two telephone calls to prove how emphatic the bank was on this point, but even the call that I do have is unequivocal. This was not an unguarded comment by an unsupported and uninformed staff member. The adviser told me that he had spoken to not only his own line manager - who was already fully aware of the case - to confirm this but that he had also personally checked with the cheque clearance team. in fact the adviser even offered to let me speak with Michael in the cheque clearance team to confirm it. The adviser did say something about when the second cheque cleared. If you think it is important I can listen to the recording and transcribe the wording of the adviser on that point.

On the Monday (day 8) a member of the Money Management team rang me to say the cheque had bounced, (he could not tell me which cheque), however, even he confirmed that the money was shown as cleared funds on the (two) screens available to him. Again, there was no mention of an overdraft. They certainly did not ask me at that stage to repay it or ask if I intended to repay it.

I don't think that the word overdrawn was even used until about 6 weeks later when the bank responded to my complaint.

With regard to your point about proof, I did take a copy of my account statement on the 18th, (the Tuesday - day 9). It shows a credit balance of £9027 and an available balance of the same figure. It did not show it as overdrawn on that day. This was after the £35,000 withdrawal that I made and after the £35,000 withdrawal that the bank made. It would have shown a different figure for the available balance if the first cheque was considered not cleared but spent and the second cheque had not cleared.

The only logical explanation is that the cheque was cleared surely?

best wishes,

Nicola B

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello Des8,

Thanks for your response, I am surprised (but of course, pleased) by your interest and patience in sticking with this.

To answer your question, there was no mention of an overdraft at the time, on the Friday (day 7), I was told that the funds were cleared, the bank has failed to provide the most revealing of the two telephone calls to prove how emphatic the bank was. This was not an unguarded comment by an uninformed staff member. The adviser told me that he had spoken to not only his own line manager - who was fully aware of the case - to confirm this but had also personally checked with the cheque clearance team. the adviser also offered to let me speak with Michael in the cheque clearance team to confirm it. The adviser did say something about when the second cheque cleared. If you think it is important I can listen to the recording and transcribe the wording of the adviser.

On the Monday (day 8) a member of the Money Management team rang me to say the cheque had bounced, (he could not tell me which cheque), however, even he confirmed that the money was shown as cleared funds on the (two) screens available to him. Again, there was no mention of an overdraft. They certainly did not ask me at that stage to repay it or ask if I intended to repay it.

I don't think that the word overdrawn was even used until about 6 weeks later when the bank responded to my complaint.

With regard to your point about proof, I did take a copy of my account statement on the 18th, (the Tuesday - day 9). It shows a credit balance of £9027 and an available balance of the same figure. It did not show it as overdrawn on that day. This was after the £35,000 withdrawal that I made and after the £35,000 withdrawal that the bank made. It would have shown a different figure for the available balance if the first cheque was considered not cleared but spent and the second cheque had not cleared.

The only logical explanation is that the cheque was cleared surely?

best wishes,

Nicola B

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Trying to guess what the bank thought or expected is the way madness lies!

All we know is that you were advised that under the certainty of fate the proceeds of the cheque were available.
I haven't re read this thread, but I believe this was wrong (one day out?)
So on their advice you withdrew the cash.
The cheque was the returned (having been cancelled, again on advice of the bank?)
Following the cheque's return the bank debited your account (without prior advice to you- bank failure).
This put your account into a negative balance, which the bank accepted as an informal request for an overdraft which was granted (as basically it was a recognition of the fact of negative balance)

This is not really a question of whether they made a conscious decision to grant an overdraft, but is an automatic reaction to events which have occurred.
It is the bank's way of justifying a position, regardless of whose fault. No conscious decision would be made to grant such an overdraft, but if questioned the bank would point to its T&Cs as justification.
(Because there is an overdraft, the customer pays regardless of the banks contribution to its cause.)

If you had asked for a formal overdraft of this amount, it would depend on a number of factors as to whether or not it would be granted.

Do you know for sure that the bank allowed the overdraft on the understanding there was a second cheque in the pipeline, or is this your interpretation of their actions?
I very much doubt that the peeps to whom you were speaking would have the authority to allow you to draw that amount of money against an uncleared cheque.
I SUSPECT that, for some reason unknown, the money was showing as cleared in your account, and the bank were caught out when it was returned. But you'll never prove it.

I don't think anyone is going to be interested in viewing this as a loan.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

thanks Des8,

Firstly, I hope the teeth (and the credit card) survived the day intact.

Thanks for your reply.

I suppose the question then becomes, did the bank agree an overdraft or did it clear the cheque? Do you think that is what it will come down to? Do you think that this will be what a court would look at? If so, what do you think about the following?

If the bank claims that this was an overdraft, do you think it would it be reasonable to say that, for this level of funds to be made available, the bank would have had to have agreed it, i.e. would have had to have made a conscious decision? They have a right not to grant informal overdrafts after all and this in anybody's book is a large sum of money.

Do you think that an informal overdraft of this amount on this type of account (this type of account meaning one that usually had a low level of funds on it?) would have been granted normally?

The reason that I ask this is because my case is that the bank cleared the first cheque in the expectation that the second cheque would clear. If the bank's case is that it allowed an overdraft it would have to show that it acted reasonably, the only action that could possibly make this reasonable is, again, the expectation that the second cheque would clear. There can be no other reason as this account did not have a track record of much money in it and I would have no means to repay it.

Is it reasonable to suggest that, if the court focusses on this issue of whether it was an overdraft or a loan, the first step is to decide whether this was a conscious decision to free up the money?

what do you think?

Nicola

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

To recap: what he bank did was to reclaim the credit which had followed your mother's first cheque.
Because you had drawn against that credit (the bank had confirmed you could under the certainty of fate rule) this debit by the bank caused your account to go overdrawn.
You did not cause the negative balance, but it would still be an overdraft.
Para.2.2 of terms & conditions make this clear. I have italicised the bit where IMO they failed: "A cheque paid into your account may be returnedunpaid. If this happens we will tell you and the amountmay be taken from your account...... . If you withdrawsome or all of the amount of a cheque which is laterreturned unpaid and this withdrawal or the unpaidcheque causes your account to go overdrawn or overany formal overdraft limit, this will be considered aninformal request to access our overdraft services inaccordance with condition 13."

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

ha ha,

great thanks, hope dental appnt goes well when dentist looks in later :tinysmile_twink_t2:

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I'm about to go out (dental appointment in Swansea so OH wants to go shopping as well), but I'll look in later.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hi Des8,

I have had a more detailed look at your reply and it is very helpful. There is a lot in it and I wondered if I could first ask a bit more about our ‘rose by any other name’, I think you will consider it as a court might so I'd like to run it past you.

In the Co-operative Bank’s terms and conditions it refers (13.3) to formal overdrafts and then 13.4 refers to informal overdrafts, it says:

“ If you have not requested our overdraft services in accordance with condition 13.3 you may still request our overdraft services by making a payment or withdrawal from your account, even though you do not have available money in your account, no overdraft limit has been agreed or where the payment or withdrawal would cause you to exceed any formal overdraft limit. We will consider such payment or withdrawal as an informal request to access our overdraft services in accordance with this condition 13.4. It will be within our discretion to agree your request for overdraft services in these circumstances and we can charge you as set out in our account charges leaflet. An overdraft not agreed in advance is more expensive than one that is.
13.5 Whether or not we agree any request from you under condition 13.4, you agree to immediately pay into your account enough money to bring your account into credit or within any formal overdraft limit.
13.6 We may at any time reduce any formal overdraft limit, subject to these conditions. You agree to repay all amounts owed to us by your use of our overdraft services at the end of any agreed term or immediately on our written demand. Any written demand will be sent by post to the address you last notified to us and will be treated as having been received by you 48 hours after posting. We will normally give you warning that your overdraft must be repaid or its limit reduced, but we may ask for repayment or reduction immediately. If possible, we will give you prior notice but we may ask for repayment without notice. Until repayment, you will continue to pay interest and charges both before and after any court order in our favour for repayment.”

It seems to me that, under these T&C’s that:

a) The bank can define something as an informal overdraft only if it is caused by a payment that I have made. In this case I did not make the payment or agree the payment, the bank took it. I wonder if this is why they use the term ‘go in debit’, because they know what happened does not cause an overdraft under these T&C’s. What do you think?


b) Under these T&C’s, for an informal overdraft to exist, the bank seems to have to agree it. It seems that they treat the debit as a request for an overdraft. If the bank claims this is an overdraft then they must also have agreed it. This would be a fairly reckless step to take on this account and it doesn’t make sense to treat it as an agreed informal overdraft one day and to not agree it the next day.


c) It also appears that the bank should have written to me to ask for the money to be repaid or given me prior notice, they did neither of these things.

I’d welcome your opinion on this,

Best wishes,

Nicola

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hello Des8, that is realllllllllly helpful, thank you.

I have been unable to access the internet since the weekend as I am away from home and have a 'network adapter problem', so I apologise for the delay. I will read your advice in detail and follow all of it.

I have also received a reply from the Om unsurprisingly saying that he has considered the evidence in the letter from my mother's bank but that it is not sufficient to make him change his mind. He did not address the issue of the fact that my bank allowed me to withdraw the funds on what he calls day 2. So I will write again to ask the result of that issue.

thanks again, I really appreciate your help.

Nicola

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello Des8,

thank you for your response, yes, they sent me a copy of the defence on 15th April.

As the court has given until the 8th of June, do you know if it will send out the Directions Questionnaire before then or after and how much time will they give to return it?
As it is in court's diary system for 8th, I expect nothing will happen until then. Time for returning DQ? two/three weeks in my experience
Also, can you tell me if the fact that the judgment has been set aside but the case has not been struck out, means that it will not be struck out? Or do you think that that will that be considered separately later?

It starts with saying that the claim 'lacks particularity, discloses no reasonable grounds for bringing claim and is an abuse of process and should be struck out.'
IMO standard request to strike out made more in hope than expectation. Just applying pressure to a LiP

This is presumably mainly because I didn't put any detail into the original on-line claim, I just used the allocated characters. (Brevity not my default position it took me some work to achieve that too)

It says I am put to 'strict proof' of my claims that the bank made a 'misprediction' and 'commercial loss'.

These points can be dealt with in your "Reply to Defence" which you send in with the answer to Directions Questionnaire (copy to defendant also)

It then states some facts, i.e. when the cheques were paid in, cancelled, my mother was the drawer etc. Interestingly, it gives no information about when the bank received the cheque or what happened to it. That is quite an 'oversight'.

It also does not call the sum on the account an (which has specific legal meanings I think), it only refers to it as a 'negative balance'. I think that is interesting too, it gives no authority for applying that negative balance and that is obviously the basis of my case.
If you have a negative balance on your account you have an overdraft. It may be authorised (ie have prior agreement) or unauthorised. A rose by any other name...
An overdraft is an extension of credit allowed by the bank to an account holder.
If the bank refuses to allow an overdraft they return requests for payments unpaid.
If they allow a payment which causes a negative balance they allow an overdraft (authorised or unauthorised), even if that payment is to themselves.

It asks for 'strict proof' of when the sum claimed was removed from my bank. I think this is because although the sum in cleared funds on my account at the time the bank took the £35,000 out of my account was £9052 and that is what I claimed, it should have been £9027 (this is because a cheque for £25 I had written before this issue arose was later cashed on
that account). I have told the court I accept the £9027 figure and I hope that will deal with that issue.

I think I have answered all of the issues in the particulars of claim that I filed later, but I will check when I can. I sent the bank a copy of that.
I know you sent a amended "Particulars of Claim" earlier. However now that you have been informed that the judgement has been set aside is the time to apply to change your PoC
Did you obtain court's permission to amend your PoC? See here: http://www.legalbeagles.info/forums/...Practicalities

I have to go out shortly and won't have access to the internet until maybe late tomorrow, so please don't take any failure to respond today as other than inability,

best wishes and thanks again,

Nicola

Comments in red

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello Des8,

thank you for your response, yes, they sent me a copy of the defence on 15th April.

As the court has given until the 8th of June, do you know if it will send out the Directions Questionnaire before then or after and how much time will they give to return it?

Also, can you tell me if the fact that the judgment has been set aside but the case has not been struck out, means that it will not be struck out? Or do you think that that will that be considered separately later?

It starts with saying that the claim 'lacks particularity, discloses no reasonable grounds for bringing claim and is an abuse of process and should be struck out.'

This is presumably mainly because I didn't put any detail into the original on-line claim, I just used the allocated characters. (Brevity not my default position it took me some work to achieve that too)

It says I am put to 'strict proof' of my claims that the bank made a 'misprediction' and 'commercial loss'.

It then states some facts, i.e. when the cheques were paid in, cancelled, my mother was the drawer etc. Interestingly, it gives no information about when the bank received the cheque or what happened to it. That is quite an 'oversight'.

It also does not call the sum on the account an 'overdraft' (which has specific legal meanings I think), it only refers to it as a 'negative balance'. I think that is interesting too, it gives no authority for applying that negative balance and that is obviously the basis of my case.

It asks for 'strict proof' of when the sum claimed was removed from my bank. I think this is because although the sum in cleared funds on my account at the time the bank took the £35,000 out of my account was £9052 and that is what I claimed, it should have been £9027 (this is because a cheque for £25 I had written before this issue arose was later cashed on that account). I have told the court I accept the £9027 figure and I hope that will deal with that issue.

I think I have answered all of the issues in the particulars of claim that I filed later, but I will check when I can. I sent the bank a copy of that.

I have to go out shortly and won't have access to the internet until maybe late tomorrow, so please don't take any failure to respond today as other than inability,

best wishes and thanks again,

Nicola

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Your next step will be a Directions questionnaire sent by court, together with a copy of the defence.
This has to be completed & returned to court so the court can decide to what track to allocate the case
At the same time you can file (and serve on defendant) a reply to the defence.

The bank have already filed a defence, has that defence been served on you yet?