Can the bank ‘UNCLEAR’ cleared funds?

[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.

[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.

[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

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I have been reading this thread with great interest and trying to understand the reasoning behind it all. Des8 has just summed it up for me, nobody is really sure what the motivation is. Why can't the claim be for any amount up to the alleged loss ? I'm afraid I cant see any loss I just see an opportunist trying their luck and managing to draw on funds that they were aware shouldn't have been there as a lot of us might try. Because they managed to do that they have since researched and decided that they might be entitled to keep said funds on a technicality even though they are aware there has been some sort of error. So far the nearest thing to a loss I see is the full £35k but only if you really do believe there is entitlement there in the first place any other losses for the removal of the £9k have already been addressed. As the thread goes on we get into the technicality of whether the bank could remove the funds without permission which it probably couldn't but this just looks to me as another technicality realised after the actual deed of drawing on funds that were known shouldn't have been available had taken place. I might be un welcome for saying it but I believe this is what a barrister would argue and a court would agree with and somebody will be having a very expensive day out.

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.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello Meellis,
thank you for your comments and I can't disagree with what much of what you say. However, the fact is that the funds should have been available, that is not only the t&cs on the account and the basis it seems of the whole banking procedures internationally, but also, as you say, a 'technicality'. I don't make these rules and I have no doubt that any bank would use this rule/technicality when it suited them......

I'm not sure what you mean by re-instated, the bank essentially took the £9,000 and applied a £26,000 overdraft, after the harassment and the result of the investigation, under duress, I brought the account back to a zero balance by putting £26,000 into the account and it has remained at that level, except that I left funds for the Subject Access Requests that I made.

EXC, to answer your question, yes, I believe that the whole £35,000 is 'technically' mine or 'mine' as I like to see it and I haven't seen anything here that suggests otherwise. However, the bank has created this split by taking what it could when it could, without concern about the rules. My £9,000 would have mitigated their commercial loss of £35,000 which I believe that they would have know they could not get back in any court in the land any more than if they had bought shares in a company that went bust over that weekend.

The simple fact that I withdrew the money when I knew that the cheque would bounce is irrelevant I think. The bank also knew the cheque would bounce. They told me that 'when a cheque takes this long to hit the account it is applied as cleared funds'. My case is that the bank relied on the second cheque clearing and I think that this is the case, this is then the 'misprediction', i.e. the wrong commercial decision, not a bank error. Here is the basis of the difference.

"In the case; Dextra Bank and Trust Company Ltd v Bank of Jamaica UKPC 50 (26 November 2001) 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.

A bank error is where the bank tells you something that is wrong, not where it tells you something that is right. Here is the list of examples of bank errors in my case:

Firstly, with relation to timescales for the cheque to appear I was told the following by different staff members:

1. up to 7 working days
2. 3, 5 or 12 days
3. 10 days
   10 working days ‘before they show on the account’
   10 or 12 days
   7, 10 or 12 working days
   10 days
   7 working days
   7-10 working days
   6 working days

Other bank errors in this case I was told:

1. If a cheque did not have the correct details for a cheque to be paid into an account, the bank would put them in the bin.
2. The bank can only look for a missing cheque once the funds had left the payer’s account.
3. ‘There is a form’ and ‘there is not a form’ and there is a form for searching for missing cheques paid in at the post office.
4. There is a process/there is not a process for searching for cheques paid in at the post office which can only be used 5 days after deposit.
5. It is not possible to stop the money management team's phone calls and letters as they are done automatically even when the issue is under investigation.
6. XXXX from the money management team said that Money Management does not have access to the banks Terms and Conditions.

XXX manager, said they don’t have a fax number, the bank doesn’t accept faxes nor letters as they are telephone banking (recording).

These are quite different from a commercial decision IMHO, what do you think?

regards,

Nicola

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Thanks Exc and Mellis.
Don't want to go off at a tangent so propose starting a new thread on Lamppost headed "limiting amount claimed"

[meellis]

Re: Can the bank ‘UNCLEAR’ cleared funds?

From what I understand the £9k had been reinstated and compensation of sorts had been awarded, the majority of the thread is around the drawing down of funds from one of two cheques which were known by the OP has been cancelled.

[EXC]

Re: Hello Lovely People!

Must the claimant claim the full amount ? Why can't the claim be for any amount upto the alleged loss?

I might be wrong but I was under the impression that the claimant was a alleging a loss of £9k rather than £35k so it would be helpful to know.

But if you're right and she is alleging a £35k loss but only claiming £9k (for whatever reason) then if she is successful, what is the status of the remaining £26k? Does it mean she can make further claims for the balance?

Judges quantify losses carefully to ensure the claimant does not obtain in excess of his losses and the defendant is not penalised by overpaying

I'd say that a judge's job is to establish exactly what the loss (if any) is and proceed on the basis of what the claimant is entitled to in law.

[meellis]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I have been reading this thread with great interest and trying to understand the reasoning behind it all. Des8 has just summed it up for me, nobody is really sure what the motivation is. Why can't the claim be for any amount up to the alleged loss ? I'm afraid I cant see any loss I just see an opportunist trying their luck and managing to draw on funds that they were aware shouldn't have been there as a lot of us might try. Because they managed to do that they have since researched and decided that they might be entitled to keep said funds on a technicality even though they are aware there has been some sort of error. So far the nearest thing to a loss I see is the full £35k but only if you really do believe there is entitlement there in the first place any other losses for the removal of the £9k have already been addressed. As the thread goes on we get into the technicality of whether the bank could remove the funds without permission which it probably couldn't but this just looks to me as another technicality realised after the actual deed of drawing on funds that were known shouldn't have been available had taken place. I might be un welcome for saying it but I believe this is what a barrister would argue and a court would agree with and somebody will be having a very expensive day out.

[des8]

Re: Hello Lovely People!

. As I understand it if your claim had merit it could only be for £35k.
.

Must the claimant claim the full amount ? Why can't the claim be for any amount upto the alleged loss?
Judges quantify losses carefully to ensure the claimant does not obtain in excess of his losses and the defendant is not penalised by overpaying

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

thanks Des, you obviously concentrate on the papers, well done.

hello EXC, thanks for your input. Yes, I think that if the account had happened to have had a zero balance then I would not have been able to pursue it in the small claims court and I could not have afforded to go to a higher court with the risks involved. However, the fact that I could not have afforded to pursue it would make no difference to the fact that I believe that I would have won if I had been able to in the same way that I believe in this to take it to the small claims court.

Peter Birk's book on unjust enrichment taught me that the principle is that, for a claim of unjust enrichment, you have to "follow the money". I think that the bank may have been preparing for a claim of unjust enrichment against me if no money were returned to the account, because that is exactly what it did, in fact their 'investigation' which was supposed to be into what happened to my cheque, focussed almost exclusively on "following the money". Their investigation clearly showed the £35,000 coming in and the £35,000 going out (with timings for those transactions given to the second and nothing about my cheque!). They would have had to do that in case they needed to "follow the money" later to my other bank account and claim it from there (or beyond). However, having done that that makes the £9,000 separate from the £35,000, (IMHO of course ).

Nicola

Nicola

[EXC]

Re: Hello Lovely People!

However, very unusually, at the time I had £9,000 in my account in cleared funds and what the bank did was to take all of those funds and apply an overdraft for the remainder of the £35,000, leaving a big debit balance. They then began a programme of harassment (by way of phone calls and high charges) - even though we had registered a complaint and it was under investigation - until we put money in to bring the account to zero. As far as I can see, if I'm right, then the bank had no right to take those cleared funds from my account and I was thinking that perhaps the way to deal with this would be to go to the small claims court for the £9,000.

I have written to the bank asking what power it used to remove the £9,000 and they have written back to say that I requested it and so it was with my authority, but this is yet more nonsense and the evidence is clearly there in the bank statement that the bank took the £35,000.

The inference is that if you happened to have had a zero (or less) balance in your account at the point the bank debited the £35k, you wouldn't have a claim. As I understand it if your claim had merit it could only be for £35k.

Judges quantify loss very carefully and I can't see that the extent of the bank's liability is dependent on the credit balance at a given point when it has no control over what it is.

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

"how do you show that the principle of certainty of fate means you have a legal right to the money?"
[/COLOR]Perhaps by quoting this fromhttp://www.co-operativebank.co.uk/customerservices/managingyouraccount/transactionscharges/cheque-clearing-cycle

• "From ‘certainty of fate’ you are assured that the value of a cheque deposited on your account is yours."

Yep, that'll do it .... lol

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Amethyst, I'm interested in why you think T is 'clearly the day it arrives at the collecting bank'? That is not a transaction.

Even if it were, then the earliest the bank has declared it knew where the cheque was, was on the 13th, so then the 13th presumably would be T=0 and I would have taken the money out on T=1.

Also, the role of the bank changes once funds are cleared, the funds are mine and the bank becomes the guardian of those funds. If a credit card or electricity company for example, thought I owed them money then they can sue me but they can't just take money from my account even if they have my bank details. The bank should have done that but until then the funds would be mine.

Crazy Council, just to be clear, I don't have the money, the bank has it,

regards,

Nicki

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Wasn't aiming at anyone in particular, and certainly not you Sharon. It was a comment I should perhaps have kept to myself. Apologies if I upset any one>

"how do you show that the principle of certainty of fate means you have a legal right to the money?"
Perhaps by quoting this fromhttp://www.co-operativebank.co.uk/customerservices/managingyouraccount/transactionscharges/cheque-clearing-cycle

• "From ‘certainty of fate’ you are assured that the value of a cheque deposited on your account is yours."