Can the bank ‘UNCLEAR’ cleared funds?

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Not convinced this helps

This is in reference to 2-4-6 in Ray Cox’s 2013 advice:-



If the cheque is returned unpaid the account of the holder will be debited, save that this cannot be done without the holder’s permission after the end of the sixth day following deposit of the cheque (subject to conditions).



The 2-4-6 customer promise is a promise to the payee of the cheque.



A bank cannot debit a beneficiary, who has paid a cheque into their account, after T+6 ( where T is the day it is credited and T+6 is 6 business days after that day) unless the beneficiary gives his/ her express permission that their account can be debited ( highly unlikely). The reference in Ray Cox’s to ‘subject to conditions’ is that if the beneficiary/ payee is a knowing party to a fraud, he/she can be debited after T+6.



It should be noted that Mr Cox’s advice was on the subject of image based processing, not unpaids. The 2-4-6 system has been in place since 30th November 2007.

I'll go back to clarify the ''highly unlikely'' as it gives no reference to whether it can bring a legal claim to recover the funds.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,

thanks for comments,

yes, Des you remember correctly. On the 14th I was told by the customer service adviser that the cheque had definitely cleared due to the time taken to show on the account. He said this after he had he consulted with his manager (who was already aware of the situation as he had had been involved the day before and was due to call me back). I asked the customer service advisor to find out what had happened to the (first) cheque and he said he would ’check it out, find out all he could, make sure he got the right info’ and call me back, he called me back (twice) and each time said that the cheque was cleared. He said he had personally checked with the cheque clearing team and he even offered to put me through to the cheque clearing team to speak with (named person) in the cheque clearing team.

On the 17^th (i.e after I had withdrawn the money) I spoke to (named person) in the money management team, he confirmed that one cheque was shown on the system as ‘cleared’ and one was shown as ‘waiting to clear’, he also checked with his colleague and his manager. This is all on the recordings that I have (and there is more on the recording that the bank has not provided).

I don’t think this shows the funds weren’t cleared.

I don’t think they could really hope to argue that the cheque had not cleared – given the evidence. Certainly (as I keep saying), even the bank has never actually said that the cheque was not cleared, There is only the ambiguous statement ‘mistakenly told’.

Des, with regard to the T=Transaction definition from the OFT Des, firstly, this is the ‘maximum timescale’ and the bank is not obliged to follow that (I can already hear Amethyst sighing ‘that woman just sees what she wants to see, is there no limit to her ability to do that……. Lol xx).

However, if the bank was taking the OFT view you describe then T=0 would be the 14^th, (i.e. the day it showed on the account). If that were the case then this would mean that the bank would have allowed the money to be withdrawn on T+1 – unthinkable surely?

Instead, the bank states (in its defence) that the 14^th was T+2. For the 14^th to be T+2 then the 13^th would logically have to be T+1 so the 12^th would logically have to be T=0. Given that the bank wrote to us on the 13^th suggesting that they didn’t know where the cheque was, (but actually saying that the cheque was not ‘at the bank’) how could the 12^th then count as T=0?

MissFM, I agree completely that cleared for value is the same as 'cleared for withdrawal' and 'available' and all 3 are different for cleared for fate (so we can agree on this, hurray!)

However, although I respect that you think that you know that the customer service advisor meant, I don’t understand how you can think that you know what the customer service advisor meant. What he actually said was “cleared/yours to keep/you can spend on what you want/yes, even if it was a million pounds/ it is because of the time it took to hit the account/I can put you through to the cheque clearing team to explain it to you…” and somehow you seem to think that you know what he really meant to say was ‘available/cleared for value/cleared for withdrawal’ (an smorgasbord of exciting options for him to choose from). I have to say that the evidence is against your interpretation on this one and we may have to agree to differ on this.

Interesting the quote you have put “. You can pay in a cheque in a number of other ways - such as at a cash machine (at some banks), by post or at a Post Office. However, these may all affect when your bank actually receives the cheque and the timescale starts. If you are not sure when day 6 has passed you should check with your bank.

When I rang the bank I was not seeking information about the cheque clearing, I was only concerned with how it had suddenly appeared and where it had been. However, I think it would be reasonable to say that the bank did indeed confirm that the cheque had cleared you suggested here.


I also agree with you MissFM that “When a bank uses the term "cleared" it means the cheque has completed the clearing system”. In my case the bank repeatedly used the term ‘cleared’ and IMHO it did mean it had completed the clearing system and therefore, as you also say “the cheque can no longer be returned unpaid and the payee can be certain the money is theirs (unless they are a knowing party to a fraud).” The quote you have used seems to supports my view that I am certain the money is mine (I'm speaking technically of course as the bank actually has it ha ha!).

You said “You also say “The Co-Op seems to dwell on T4 as cleared”
I don’t know where this comes from as I don’t know where the Co-operative Bank ‘dwells on T4 as cleared’, can you explain that a bit please? It might just be my memory.

You also say “the timescale is no longer your preferred argument”. Again I’m not sure why you would say this, the timescale remains a central issue. However the thread was always primarily about the unclearing of cleared funds – that’s its title after all.

The definitions that you have given in the glossay are interesting. This again says that the cheque would be cleared after 6 working days, surely that supports my case?


You are right of course about Dextra, it looks a bit bad that I said I would read it. I have to confess that I did attempt to read the whole judgement back in 2012, (it was referenced when I first googled this) but I couldn’t understand all of it – I found it too complicated! However the conclusion and explanation about the difference between a bank error and a bank misprediction was very clear and that is what I think it important in this case.

But, (for better or worse) I understand a lot more about the banking procedures now and might have a better shot at understanding it now, so I will give it another go….

Best wishes,

Nicola

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Thanks for this Amethyst, of course the way I see it this can only mean one thing (lol), that the bank is not allowed to debit the account without the permission of the account holder and that it would be highly unlikely that the account holder would give that permission.

I imagine if there was a fraud, then the debiting of the account after T+6 would be pretty low down on the list of things to worry about!

good luck with checking it out xx

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Yep, it's the legal position we need....ie. if you said NO to the bank taking the money bank, if they would be able to take other action to recover the funds, legally.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Yes you might think that an 'ethical' bank would ask politely but I didn't quite get the opportunity to say 'no'......

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello again,

I'm very pleased to be able to say that Des8 was right in his views in this case. (Well, so far at least).

On Wednesday I had the small claim hearing and after a 'trial' lasting 2 and a half hours the judge decided in my favour and ordered the bank, within 21 days, to pay me £9027 and the court costs to date that amounted to £750. The judge found that the T&Cs on the account and the advice I was given by the bank meant that the funds became mine once the stated timescale was passed and I then had the right to do what I wished with them. Result!

The barrister representing the bank immediately requested permission to appeal on the basis that I had not suffered a 'loss' but the judge refused. I have already told both Des8 and Amethyst this result privately (and thanked them both). They have advised caution at this stage as their view is that the bank may make a further appeal within 21 days. We will have to wait and see.

Anyway thanks to everyone who has made contributions on the issue to date, it has all helped me see the bigger picture,

best wishes,

Nicola

[nemesis45]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello again,

I'm very pleased to be able to say that Des8 was right in his views in this case. (Well, so far at least).

On Wednesday I had the small claim hearing and after a 'trial' lasting 2 and a half hours the judge decided in my favour and ordered the bank, within 21 days, to pay me £9027 and the court costs to date that amounted to £750. The judge found that the T&Cs on the account and the advice I was given by the bank meant that the funds became mine once the stated timescale was passed and I then had the right to do what I wished with them. Result!

The barrister representing the bank immediately requested permission to appeal on the basis that I had not suffered a 'loss' but the judge refused. I have already told both Des8 and Amethyst this result privately (and thanked them both). They have advised caution at this stage as their view is that the bank may make a further appeal within 21 days. We will have to wait and see.

Anyway thanks to everyone who has made contributions on the issue to date, it has all helped me see the bigger picture,

best wishes,

Nicola

Good result!!

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

p.s. hmmm, does anyone know if 21 days means 21 calendar days or 21 working days?

Also, will the court automatically tell me if an appeal is requested?

Finally, how long is it likely that it would take to get a decision on whether the appeal was allowed or refused and how soon might there be an appeal hearing if one was granted?

best wishes,

NB

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I believe it is calendar days ( as the CPR doesn't state otherwise)

Appellant’s notice

52.4

(1) Where the appellant seeks permission from the appeal court it must be requested in the appellant’s notice.

(2) The appellant must file the appellant’s notice at the appeal court within –

(a) such period as may be directed by the lower court (which may be longer or shorter than the period referred to in sub-paragraph (b)); or

(b) where the court makes no such direction, 21 days after the date of the decision of the lower court that the appellant wishes to appeal.

(3) Subject to paragraph (4) and unless the appeal court orders otherwise, an appellant’s notice must be served on each respondent –

(a) as soon as practicable; and

(b) in any event not later than 7 days,

after it is filed.

(4) Where an appellant seeks permission to appeal against a decision to refuse to grant an interim injunction under section 41 of the Policing and Crime Act 20092 the appellant is not required to serve the appellant’s notice on the respondent.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Obviously pleased with the result..... it's good to see the little man (or lady!) win.
Congratulations.
Regarding the possibility of an appeal, before being given leave to appeal , the appellant has to convince the higher court
i) the appeal must have a real prospect of success
ii) there is some other compelling reason why the appeal should be heard

Point ii) generally means there has been a substantial procedural irregularity, or the original judge has got it wrong on a point of law or grossly misunderstood the evidence.

Obviously the trial judge was unimpressed with the defendant, but the trial took substantially longer than estimated which indicates he examined all the evidence.
The fact the defendant's barrister, and presumably the defendant, are aggrieved at the outcome is not sufficient reason for a retrial. The defendant cannot introduce new evidence (unless it has just come to light and wasn't previously available) so although I cautioned about the possibility of an appeal, realistically I doubt they would obtain permission even if they apply

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,
that's good, let's hope you continue being right mashappy:.

As they relied only on written evidence then it might depend on whether the 'no loss' issue was mentioned in any of the paperwork and I'm not sure that it was, (but can't bring myself to re-open the papers at the moment)

[enaid]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Well done on this so far and I truly hope it is the end. Not very often Judges take the 'ump with the banks even if they didn't follow the rules.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

thanks, appreciate that

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

hi,
that's good, let's hope you continue being right mashappy:.

As they relied only on written evidence then it might depend on whether the 'no loss' issue was mentioned in any of the paperwork and I'm not sure that it was, (but can't bring myself to re-open the papers at the moment)

It won't matter if they mentioned it or not.
This would be a new argument (not evidence) if they were to bring it up now, but it was available at the time of the trial so should make no difference.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

During the trial the bank did say that there was no loss, but it seems that as there was no witness statement this does not count as evidence.
In his judgement the judge said that the bank had taken the money wrongly as the funds were mine. He said the bank had given no oral evidence. He said that the Certainty of fate principle applies. He said the CoF is a device adopted by banks to ensure cheques placed move quickly through accounts. He said it seems clear to him that 'paid in' means paid in at the post office, so for sums paid in at the post office on the 5th, the time runs from the 6th, so time well passed before the 17th when funds were withdrawn. He said it could have been a claim for £35,000 and I limited it to the £9,027. The bank failed to comply with T&Cs and also gave strong and persistant advice to me that the funds were cleared. The lawyer asked what the loss was and the judge said the loss was of the funds.