Can the bank do this??

chattychappy

You may not be able to return it under distance selling rules if the equipment was especially built - ie bespoke - and you knew this. Of course despite this, Dell might permit it's return anyway under their rules.

No problem with the bank clearing the transaction. Why wouldn't it be legal? The lack of an pre-arranged overdraft facility doesn't operate as a guarantee that transactions will be bounced if you have insufficient funds.