Can the bank ‘UNCLEAR’ cleared funds?

[MissFM]

Re: Can the bank ‘UNCLEAR’ cleared funds?

you are very probably right, but as was pointed out earlier this is a case of holding the bank to its terms and conditions. There are a set of accepted rules which say that when a particular point has been reached funds belong to the depositor. This is so depositors have certainty no matter what mistakes occur within the banking system. The bank dispute this point had been reached.
From OP's point of view the galling point is that if her mother had stopped the cheque a little later the bank would not have had any argument at all.

Quite.

This would be an awesome test case to fight if the facts were slightly different.

Spurred on by massive respect for Des, I have reread this thread yet again, with great care.

I note that in the first half, you both conceded that the timings for T 2-4-6 didn't meet the requirements for "certainty of fate". I agree with this.

Cheque envelopes are sent unopened by the Post Office

® to Santander Bank Processing Centre. Any discrepancies will be advised to The Co-operative Bank.

The above, from the PO Handbook referred to in Co-op's T&Cs, IMO clarifies that no transaction could be classed as in train until the envelope is opened by the processing centre. The PO simply receives and delivers it (although I believe it now has arrangements with some banks to process). Hence the 1-2 extra days. Ame has summed it up many times above.

Nicola, you expressed the view early in the thread (sorry, it's just too complicated to quote everything, but it's there) that the cheque had been sent to be examined by their fraud centre because of the fact that it was written by one person and signed by another, and because the signature was shaky. You opined that that was the reason for its disappearance and sudden reappearance upon the issue of a replacement cheque. That doesn't seem unreasonable to me and I don't know whether a cheque with questionable authenticity would be subject to the 2-4-6 rule until it was verified - I'm sure others here will know. Although, if that were the case, the bank should have told you.

Further, the bank has admitted that you were told by employees that the cheque was cleared, but has said that the assertion was an error for which you have been compensated, and that the cheques were never cleared. Without hearing the conversations, it's impossible to say whether there were, additionally, misunderstandings. My guess is that staff should have told you that the funds had been made available for you to use immediately although the cheque(s) hadn't yet cleared - but, also IMVHO, in the circumstances that's moot. The FSO awarded you extra compensation for this, which you refused as at that point you intended to sue for the full £35,000 (though I also agree that that makes more sense than the £9,000, which seems arbitrary, but I don't believe there's any way you can win this, whichever).

There was no material loss, the timings and evidence are extremely ambiguous (and I mean factually - legally - rather than morally).

There is also the possibility that the appearance of fraud will gain traction in court - whether you continue to be shocked by the possibility of such a construction or not, it could be argued on the facts, and that argument could escalate, along with costs.

I would be delighted to be wrong x

[meellis]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Miss FM you are describing some of my feelings there. I would like to see a good result because I get fed up of seeing the common man being held strictly to terms and conditions when the big boys seem to get away with using them as guidelines. Unfortunately though I can see some of the details being argued by a competent lawyer/barrister and counting against the op in particular the knowledge of the cheques being cancelled and the timings.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

One of the difficulties for those who claim the op was aware the cheque was stopped and therefore removed funds she knew were not hers is the circumstances of that stop order.
As the Co-op couldn't find the cheque they advised a stop was placed.
This was done on 13/12, being either T+5 or 6.
The bank then confirmed 14/12 funds were cleared.
Now a stop order has to be placed by T+3 to be effective as that is the day on which a paying bank returns an unpaid cheque.
The confirmation that the funds were cleared would be an indication that the stop was too late, and the cheque found and funds cleared.
It was this uncertainty that caused the second cheque to be stopped.

IMO whichever way one looks the Co-op fouled up, and refuse to stand by their error in spite of the rules which are supportive (IMO) of Nicola.
Whether the courts agree is another matter.

[MissFM]

Re: Can the bank ‘UNCLEAR’ cleared funds?

The bank denies that funds were ever cleared from either cheque, just that the staff made a mistake.

I don't disagree that the bank fouled up, just not necessarily in favour of Nicola's particular claims.

Also - had the cheque cleared before the stop was placed then the funds should have been taken from Nicola's mother's account - so the foul-up would have been corrected (it's all so convoluted!)

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

but where would we be if life was straight forward

The bank NOW deny the funds were cleared, but on 14.12 they confirmed clearance several times.

[MissFM]

Re: Can the bank ‘UNCLEAR’ cleared funds?

but where would we be if life was straight forward True!

The bank NOW deny the funds were cleared, but on 14.12 they confirmed clearance several times.

So much depends on the actual words used and how they were interpreted. Maybe you are privy to things not posted, but the available transcripts (of those conversations) haven't been posted AFAIK.

The FOS is quite interesting on this subject (in a different context)
http://www.financial-ombudsman.org.u...53/banking.htm

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Thanks to Des, I share the respect, sorry for delay in replying.

MissFM, thanks for your consideration and response. I'm not sure exactly the reference about the original thoughts about 2-4-6? Banks are allowed to define their own rules when they accept deposits via the post office so another bank's rules would not apply. The bank is allowed to say they will take, 7,10,20 days if they choose to. However, once they have defined their own rules they are then obliged, under BCBOBS, to explain them clearly and to adhere to them. Is that what you meant?

I merely suspect that the fraud team had it, firstly because the C&CCCL info says that 99.5% of fraud is detected there and that the things the original machine looks for include high value cheques, different handwritings and different inks, shaky signatures etc, Under this regime, the cheque SHOULD have been pulled out, there is no obvious reason to think it would not have been, it had all the things the C&CCCL identify as risky. Secondly, at least one of the advisers told me that they had checked with the fraud team, so that it seems part of their procedures. However, I don't know what did happen, it just seems rational that this should and therefore would have happened. Thirdly, why would they not even check the suspense account unless they knew where it was? I just think that if I was working for a bank that was given £35,000 by a customer, I would at least be expected to look for it, I spoke to at least 8 different advisers and none of them agreed to look for it, bizarre........

If the bank was not happy with the cheque they could have simply rejected it.

There are no caveats in the system about delays, the only conditions relate to the time or fraud, if the cheque is lost, if time is spent in the clearing centre, or anything there is just the days and they were simply out of time, they had a total of 7 working days to check it and then, times up.

I have considered the evidence about whether the cheque is actually cleared as follows

1. The cheque clearing on the 14^th is in line with the terms and conditions of the account relating to deposits of cheques via the post office and all of the many regulations that govern such payments made by clearing banks.
2. I rang on the 14^th December and Mr Call Centre Adviser told me that the cheque was definitely cleared, I queried this and he said he would check with the team. He rang me back and confirmed that he had checked with the cheque clearance team, that the cheque was cleared and he also offered to let me speak with the (named) person in the cheque clearance team to confirm it. (check reference ??)
3. On the 17^th December, Mr money management staff member confirmed that one cheque of £35,000 had been cleared and one was pending to clear. He also checked with a colleague and after checking said that the second cheque is due to clear in 3 days.
4. I said to Mr Mr money management that there had been no transfer out of the account of uncleared funds and he agreed that one was shown as credited and one had not cleared yet. He said “On 14^th December, there was two cheques credited for £35k which is £70k but at the close of business on the 14^th account is showing a credit balance of £43,915, so in effect, one cheque is cleared and one is pending to clear”.
5. The payments council website confirmed that, from the dates given, the funds from the cheque were ours to keep
6. At no time has the bank stated that the funds were not cleared.
7. At no time has the bank stated that we did not meet the 6 day time limit in which the cheque must be cleared to meet banking standards.
8. There was no overdraft facility on that account. It is inconceivable that the bank would allow £35,000 to be removed from an account with no overdraft facility and which would normally have a balance of less than £1,000 in it. The only way this sum could have been moved was if the funds were actively cleared.
9. £35,000 could not be removed on day 1,2 or 3 of clearing. Funds cannot be withdrawn until day 4.
10. The bank allowed £35,000 to be removed from this account to my other joint account at the bank. The funds will have had a status on arrival on that account. They must have entered that account as cleared funds as they were removed only two minutes later (see Ms Customer Relations’s letter). If the funds were not cleared how could the Defendant allow these funds to be removed not once, but twice? It would be a huge risk if the bank allowed uncleared funds of this amount to be removed without the funds being cleared.
11. The on-line account showed the funds were cleared on the 18^th
12. Ms Customer Relations’s investigation states that the second cheque was debited from the account “…within the publicised clearing cycle time and your account Terms and Conditions". Ms Customer Relations makes this statement about the second cheque which is not disputed. She does not make the same statement with reference to the cheque that is at issue. In fact, again Ms Customer Relations is silent on the issue of the relevant cheque.
13. In Ms Customer Relations’s letter she states that ‘with the knowledge that the funds had only been paid into your account on 14 December 2012 you chose to transfer £35,000….’. This is quite true, but this was only after we were emphatically told that the funds were cleared and ours to use as we wished. Ms Customer Relation's investigation does not suggest that we had no right to remove the funds, nor does she suggest that we did anything to breach the conditions of the account in doing this. She has stated a fact but offered no reason to complain of what we did. This is therefore irrelevant.
14. No reason is given and no authority quoted for what power the bank used to remove the £9,000 from our account.
15. Ms Customer Relations states simply that we had the benefit of the funds that we transferred out of the account on 15, 16 and 17 December, it is true that we had the benefit of the funds. However, Ms Customer Relations does not suggest that there is any reason why we should not have the benefit of the funds, nor that there was anything improper in this. There is no attempt to refer to any condition that says we had no right to these funds.
16. Ms Customer Relations’s investigation says that the funds from the second cheque, (which the bank applied to the account on the same day as the first cheque), would not be cleared to withdraw funds until 19^th December. If the two cheques were actually received by the bank at the same time, why did they allow the funds from the first cheque to be withdrawn on the 17^th? If both cheques hit the account at the same time they should presumably have followed the same pattern and I would not have been allowed to withdraw the funds until the 19^th at the earliest on either cheque. The fact that the bank treated the cheques clearing differently demonstrates that one cheque had definitely cleared and the other had not.
17. The bank has never stated what day the cheque arrived at the processing centre, it has said it would not 'be easy' to obtain this.

The reason Mr Call Centre Adviser rang me back was to give himself time to check whether it was true that the funds were cleared. At the end of the first phone call Mr Call Centre Adviser say he will 'get as much info as possible....will look into it and will....speak to the right department'. This was not an unguarded comment by an uninformed staff member. Mr Call Centre Adviser had spoken to his manager (who was already aware of the case as he had been involved the day before) and Mr Call Centre Adviser had checked with the cheque clearance team and the cheque clearance team told him that the funds were cleared, that is why he and I had a quite heated conversation about it. In the written notes, the call centre advisor was absolutely emphatic that the funds were cleared and that I would not believe him that I was entitled to spend the money. He was not acting on his own interpretation and did not misinform me. He had checked with the right department and was authoritative in what he said.



There is a lot of evidence to demonstrate that the cheque had cleared and as far as I am aware there is no evidence whatsoever to even suggest the idea that the cheque had not cleared let alone prove it. Crucially, the Defendant itself has never claimed that the cheque did not clear, there is simply one statement that I was wrongly advised. I do not think that the bank will specifically claim that the funds were not actually cleared. The bank has not provided any evidence to support the view that the funds had not cleared, the statement in the letter that I was 'wrongly advised' is not evidence of anything any more than any of the many other wrong statements given by the bank. NB The lawyer changed the 'wrongly advised' as described in the investigation to 'mistakenly told', I think that means that they made a mistake in telling me not that I was told something that that was wrong.

Finally, there simply is no 'appearance of fraud' and I can see no reason to say that. How could this possibly be a fraud? I just can't see it. It does seem odd that with all of these masses of issues with the bank that it could be considered in this context, let alone with no evidence :tinysmile_cry_t:

anyway thanks for your inputs,

Nicola

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

p.s. just to clarify, it never occurred to me that the stop on my mum's first cheque was too late. I had been with her at her bank branch on the 13th when she stopped the first cheque. Her bank had confirmed (after a phone call) that the cheque had not been presented to them at that point.

I really wasn't thinking about cheque clearing at the time, My only thought was about the whereabouts of the cheque. I knew no more than anyone else about cheque clearing at the time (those were the days!), It was on the 14th when both cheques suddenly appeared on my account that my mum was concerned about both cheques being presented to her bank and possibly being put on her account that she made the decision to cancel the second cheque to avoid an apparent overdrawn balance.

Nat West tells me that they received the first cheque at 8.46a.m. on 14th December and returned it unpaid at 13.51 on the 14th. They are obliged under the rules to send it immediately (by courier) back to my bank and should normally also phone the bank to tell them, so the liklihood is that the cheque would have been back with my bank unpaid on the 14th and the bank fully aware that the cheque had bounced.

The second cheque, (which showed on my account before the first one remember) was not received by Nat West until 9.12a.m. on the 18th December and returned unpaid at 13.51. (Mmm looks like 13.51 is their standard time to return unpaid cheques).

My case isn't that I thought that the funds were mine because they had been taken from my mum's account, I didn't think that. It is simply that I discovered later that the bank was out of the strict time parameters that are accepted by all banks internationally. They knew they had to clear the cheque under the rules, they didn't match the required timeframe, so they DID clear the cheque, (probably based on the assumption of the second one clearing), so by a windfall, the money was mine. If not, what are the 2-4-6 and associated rules for?

regards,

Nicola

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,

ok, had the mediation now, the bank offered to match the payment awarded by the FoS, i.e. £500 so I couldn't accept that, we'll be off to Manchester probably after all..... The mediator did understand the issue and says that she will follow it with interest.

Nicola

[Crazy council]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi

the money was mine. If not, what are the 2-4-6 and associated rules for?

so when you doing business wit an unrelated individual, you can release good's nowing its cleared funds.

How would you prove it was not intentional by yourself.

Am not against you, you just seem to be only looking at this from one angle.

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,

ok, had the mediation now, the bank offered to match the payment awarded by the FoS, i.e. £500 so I couldn't accept that, we'll be off to Manchester probably after all..... The mediator did understand the issue and says that she will follow it with interest.

Nicola

Pretty much as expected then. Be interesting to see if they do increase the offer between now and the hearing to avoid the palava of court and any risk of creating any precedent on 2-4-6 issues.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hello Crazy Council,

with the comment about unrelated individuals you seem to be introducing something that is not in the rules so I can't really respond to that.

Obviously my action was intentional on the Saturday when I withdrew the funds, but the action was solely done because the bank had informed me most emphatically about the rule on the Friday. I didn't know about it before then. I just can't see how or what else could possibly be problematic here, until someone identifies this I can't really comment on that anymore, I've explained it loads of times. Nothing personal, it just doesn't add anything.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,

the bank has not responded to my request for documents in which I cited (is that a word?) 'overriding interest'. As the mediation has failed, can I now serve notice on the court that the documents are necessary? I think I remember seeing somewhere that I can do that before the track is allocated?

Thanks,

Nicola

[Amethyst]

Re: Hello Lovely People!

If you formally requested the documents under CPR 31.14 then yes you can apply to the court to ask them to order compliance. This is an application and carries a £50 cost to apply without a hearing. There is some guidance in the library. You should chase them first though and that is only for documents mentioned in their statement of case ( defence ).

Other questions can be asked under CPR 18.

Your case is still at Northampton CCBC or has it been moved to your local court ? Just thinking as you have had your mediation appt, that usually comes after the directions questionnaire and allocation.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Thanks a lot, I'll check