Bounced cheque (with funds in another account???)

R

Ravima

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At coffee this morning, colleague mentioned that she has 2 current accounts and 2 deposit accounts with her bank, for about 26 years. All accounts are in her sole name. One current is for business (with €50K o/d facility) and the second for private use (with NIL o/d facility). The two deposit accounts are personal, one her emergency fund and the other a regular saver.

Balance in savings accounts is about €18K.

She recently drew a personal cheque for in excess of balance and it bounced. This is the first time this happened and the real reason was that she simply forgot to transfer between accounts to ensure that there would be money in Current Account.

I felt that this was wrong and that the bank should have considered her entire funds before bouncing, or phoned her in advance. Am I incorrect in this?

Are they not obliged to act in HER best interests under the Consumer Protection Code, whilst at the same time balancing this with looking after the BANK's interest in not getting stung?

I want her to complain; have the bounced charges refunded; a letter issued to the payee to confirm that there is no blot on her character; confirmation that there is no blot on her credit record and the fee paid by payee to her bank for the bouncing also to be refunded.

She does not know what to do, but is embarrassed as lives in a small town and payee is also a local.

Thanks
 
"she simply forgot to transfer between accounts to ensure that there would be money in Current Account."

There y'are now. That's the reason her cheque bounced. She did not have sufficient funds. She should make sure she does.

It can happen to the best of us. It is not sinister.

And no, no, no, no, no, no, to all of this.

"I want her to complain; have the bounced charges refunded; a letter issued to the payee to confirm that there is no blot on her character; confirmation that there is no blot on her credit record and the fee paid by payee to her bank for the bouncing also to be refunded."

Just tell the payee she made a mistake. End of.

mf
 
If the bank valued her business they would have put the cheque through. There's a reason they didn't and not just because of a lack of funds in her current account on which the cheque was drawn. Vote with her feet, if she can !
 
I can't remember the exact phrase but I always thought banks had an entitlement to "merge" balances when reviewing whether or not they paid an item. Problem with that is that when banks do that, they invariably end up with someone giving out that they "took" their rainy day money or something like that.

Regardless, this was your friends own fault. She should have made sure funds were available. However, this was also poor customer service. To me, her branch rf relationship manager should have contacted her to say she was going over her limit and to give her a chance to move funds around to cover the cheque. That is what she should be complaining about, not the fact that what the bank did was probably technically correct and within the T&C's
 
About five or six years ago I did the same and they honoured the cheque without penalty but a few months ago they charged me for being overdrawn (I don't have an o/d facility in the current account). I ahve a savings and a current account in the same bank. I guess it's down to needing to make money seeing as things are tight. I would put it down to experience as the bank did not do anything wrong and it was her own fault. She could write a letter stating her disappointment and threatening to move. All she needs to do to the person who had the cheque bounce is simply explain it and offer to pay any costs involved - these would be quite small.
 
Why is she paying by cheque in this day and age? If she paid by transfer,this would not have happened.

Why does she maintain a deposit account at all? The interest is so low, it's not worthwhile.

Some banks bounce cheques automatically. Others do review the list and ring the account holder. I am a bit surprised that this did not happen. Not sure how it works these days, but in the days when I used to bounce cheques, the bank would get the cheque on Day 1 and had to decide whether to bounce or honour it on Day 2. So they had some time. But that is probably all gone now.

I don't think she has any grounds for complaint, but she could send a nice letter, accepting it was her own fault, but asking why they did not ring her first. She could have told them over the phone to move the money from the deposit account.

It is not a matter for moving accounts if she has an otherwise good relationship with the bank.

Brendan
 
Does any actual person look at these in branches anymore? I'd imagine it is fairly computerised at this stage and computer said no! There is usually a little leeway built into some current accounts, a shadow overdraft limit, but it might not have been enough in this case.

Even though it was her own fault I think I would complain, she probably will get the fees back and sure why not try.
 
The account holder needs to ask the bank about a right of set off between accounts. From memory there is a form that has to be completed by the customer.
 

If you don't mind me saying so you're making a mountain out of a mole hill there. What blot on her character ? She just bounced a cheque, this is a non event and all caused entirely by her not managing her accounts correctly.

If the payee is out of pocket she should most definitely pay the fee, apologise and a box of chocolates maybe.
 

Legally if a bank bounces a cheque in error it can be considered libel as you are putting in writing that the customer has financial difficulties when actually they don't. There have been numerous court cases over the years confirming that.
 
The timeframe for bouncing a cheque has not changed in recent years, it still has to be unpaid the day after the drawing bank receives it. Most banks do it centrally these days, the time when a local bank manager could use his discretion are largely gone. Having said that, my understanding is that they should be looking at the overall customer position and also that they are required by the regulator to give customers an opportunity to lodge or transfer funds to cover the cheque.

As for why is she paying by cheque, 2 thoughts on that. Firstly not every part of the country has broadband to allow people to do banking quickly on-line. Secondly, if you write a cheque then the funds are likely to stay in your account for longer due to the time it will take for the item to be processed. In many cases, especially if someone is trying to manage cashflow, that can be important
 
But where is the bank error in this case? She had not enough funds in the current account that she was paying the cheque from. There is no legal obligation on her branch to contact her to warn her the cheque will bounce, and similarly there is no legal obligation on them to transfer funds from a deposit account to cover the cheque.
 
thedaddyman said:
Legally if a bank bounces a cheque in error it can be considered libel as you are putting in writing that the customer has financial difficulties when actually they don't. There have been numerous court cases over the years confirming that.
Click to expand...

You're making this up ! I'm sure banks are legally allowed to bounce cheques when funds are not in the account to meet the demand. Some bounced cheques are due to financial difficulties but most I suspect are due to the account holders error, as is the case here, occasionally it can be the banks fault. And I don't think most people would consider a bounced cheque to mean that a person is in financial difficulties.
 
Personal accounts are largely centrally controlled these days. Generally there is a zero tolerance for any cheques written which are in excess of funds available. Decision is automatic rather than made by an individual. To avoid such an event recurring the OP/Others should apply for a small OD limit on an account. No mistake made here by the bank. There is no level of overview of "who is the client" in such circumstances as bank manpower on personal facilities is effectively non-existent.
 

No I am not making it up . I've stood in the Rotunda at the 4 courts (as an expert witness) whilst barristers thrashed out a resolution to try and avoid going before a judge for issues like this. A quick google search threw up the following examples

http://www.independent.ie/regionals...0000-after-bank-bounced-cheques-27200727.html

[broken link removed]

http://www.irishtimes.com/news/damages-awarded-for-bounced-cheque-1.1117033

It's a long established principle of case law going back to the 1920's in the UK if my memory is correct.
 
In the two cases you mentioned the bank were at fault and not just for bounding cheques. Can you show me a case where they bounced a cheque where the bank is not in any way at fault and there is no money in the account to meet it.
 
Years ago when I worked in the bank there was a facility to allow funds in savings to cover cheques that would not be covered by available funds in the current account - I think we called it a set-off? But way back then banking was a profession, and not an industry, and the bank manager was called Mr MacMahon or Manager (even by the staff), and he made the call on whether or not the cheque would be honoured if it was above a certain amount. . Different times, and different procedures now, there will be very few cheques written in the next few years, especially when it costs €1.30 to write one @ BOI....
 
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