Can Santander Bank Legally be Stealing Money in Overdraft Charges from us by theft?

dunstonh

The terms & conditions authorise them. If the terms & conditions didn't authorise them it would follow that a breach of contract occurs. It doesn't.

Rubbish. Somoene going on a spending spree with money they dont have does not mean the bank has authorised them to do so. With guaranteed payment methods, the bank has no choice but to pay them and put the person into an unauthorised overdraft position. A position that the bank is entitled to charge for.

Alpine_Star

dunstonh wrote: »

Rubbish. Somoene going on a spending spree with money they dont have does not mean the bank has authorised them to do so. With guaranteed payment methods, the bank has no choice but to pay them and put the person into an unauthorised overdraft position. A position that the bank is entitled to charge for.

I don't know how many ways I can say this.

The bank authorises any payment in advance by virtue of the guarantee.

Perhaps you could come up with any banks' terms that states that using a debit card in these circumstances is either contrary to the contract or that the payment is not made with the authorisation of the bank?

slopemaster

dunstonh wrote: »

They will only do that if you are rude and/or abusive.

Not true with Santander.
When I rang their complaints dept to try to discover why my a/c was blocked, I was very restrained, but they said 'you won't get your money back unless you take us to court'. When I said 'that's nonsense' they hung up on me. I certainly wouldn't call that being abusive. In fact, even the branch manager who was there and had suggested I phone them, was amazed that they hung up on me.

jamesd

Funkyfreddy wrote: »

?? Unless I have the wrong end of a sticky stick "a week" has nothing to do with it.

Probably the wrong end of the stick. A week is enough time to notice that the payment part of the pair of transactions didn't happen on time and arrange to get the money from somewhere else. Also enough time for small delays in processing not to break things, as seems to have happened here.

Funkyfreddy wrote: »

The OP is relying on two third parties conducting transactions on the same day without enough funds being in the account to cover expected payments should the outbound one go before the inbound arrives.

Yes, that's not sensible.

Funkyfreddy wrote: »

Nobody at fault but the OP.

Maybe. If there was some unusual delay in processing the incoming payment it may not strictly be the poster's fault, but they were still working without adequate safety margin.

jamesd

Alpine_Star wrote: »

The bank authorises any payment in advance by virtue of the guarantee.

Now find a court decision that says that.

So far you've produced a court decision that it's not breach of contract for a bank customer to overdraw or attempt to overdraw. That's fine so far as it goes but it's not the same as saying that the bank authorises the customer to make the transactions in advance in breach of pre-agreed borrowing limits. The bank does authorise the merchant to take the card and accepts that it'll have to deal with it if the customer does exceed the agreed borrowing level. But authorising the merchant to take the card isn't he same as authorising hte customer to exceed their agreed limit.

Alpine_Star

jamesd wrote: »

Now find a court decision that says that.

So far you've produced a court decision that it's not breach of contract for a bank customer to overdraw or attempt to overdraw. That's fine so far as it goes but it's not the same as saying that the bank authorises the customer to make the transactions in advance in breach of pre-agreed borrowing limits. The bank does authorise the merchant to take the card and accepts that it'll have to deal with it if the customer does exceed the agreed borrowing level. But authorising the merchant to take the card isn't he same as authorising hte customer to exceed their agreed limit.

As far as I know no bank has made a legal challenge to a customer on the basis that they used a debit card to make payments that weren't authorised by the bank. Which in itself is indicative.

Having attended every day of all three test case hearings where this very subject was discussed at length I can assure you that it was the banks' pleaded position that regardless of the term 'unauthorised overdraft', each and every payment honoured is in fact authorised by the bank - regardless of the mechanism.

As you elude to the bank authorises the payment (and in turn the parties to the payment). There is no requirement for any additional authorisation because any payment will necessarily involve both parties - one of which being the bank's customer.

I don't think it is legally possible for contractual terms to both guarantee a payment and at the same time deem it unauthorised as it would fall foul of several pieces of consumer contract law.

It's also worth noting that the second judgment from the first instance test case hearing provided that pre-agreed spending limits on current accounts are not a contractual obligation on the part of the consumer or the bank and are in fact only advisory, by virtue of the contractual right the bank bestows on the consumer to exceed or attempt to exceed the limit.

Paul_Herring

bengal-stripe wrote: »

Actually, Santander is one of the few banks which process payments before debits.

Do they not have the usual requirement for funds to be present the working day before a DD then?

bengal-stripe

Paul_Herring wrote: »

Do they not have the usual requirement for funds to be present the working day before a DD then?

They probably have that requirement in place.

On weekdays, incoming monies get credited just before midnight, while DDs go out about 12:30 - 1:30 a.m.
I don't think, that credit before debit thing is guaranteed and occasionally the credits can be late.

As it obviously was in the OP's case.

jamesd

Alpine_Star wrote: »

As far as I know no bank has made a legal challenge to a customer on the basis that they used a debit card to make payments that weren't authorised by the bank. Which in itself is indicative.

Normally they would just pursue for the charges and the debt but I do seem to recall some cases of criminal prosecution for fraud using cheque guarantee cards even though the merchant was authorised to take the cheque.

Alpine_Star wrote: »

As you elude to the bank authorises the payment (and in turn the parties to the payment). There is no requirement for any additional authorisation because any payment will necessarily involve both parties - one of which being the bank's customer.

There is room for there to be an authorisation for a customer to use a card up to an agreed limit and for a merchant to be authorised up to a limit and for the customer to be breaching their agreement if they exceed their agreed limit, I think.

Alpine_Star wrote: »

I don't think it is legally possible for contractual terms to both guarantee a payment and at the same time deem it unauthorised as it would fall foul of several pieces of consumer contract law.

There are two different contracts in this case, one between the customer and the bank and the other between the bank and the merchant.

I took a look at the NatWest argreement and it's interesting that in the card section it says both that if the card is accepted by a merchant the payment must be made because NatWest is obliged to pay it and that NatWest will treat it as an informal request for an unarranged overdraft. That's carefully stepping around the question of whether the customer is authorised to do it beyond the agreed limit.

Alpine_Star

jamesd wrote: »

I took a look at the NatWest argreement and it's interesting that in the card section it says both that if the card is accepted by a merchant the payment must be made because NatWest is obliged to pay it and that NatWest will treat it as an informal request for an unarranged overdraft. That's carefully stepping around the question of whether the customer is authorised to do it beyond the agreed limit.

Indeed.

I dug out the transcripts of the first instance test case hearing and the bank's Counsel did go a step further - my emphasis:

''That is my first introductory point. It addresses the question of the term "unauthorised overdraft".

My Lord, it has to be realised, and the OFT acknowledges this in its skeleton, that "unauthorised" is a misnomer. It is a widely or was a widely-used misnomer, but it is simply a misnomer and I want to explain why. Any unauthorised overdraft is in fact authorised by the bank, obviously. And the accurate title for an unauthorised overdraft is "unarranged" or "not prearranged", and it is not materially different from a prearranged overdraft.''

As the payment instruction is the contractually permissable mechanism that puts you into an authorised state, it is difficult to conclude how the mechanism itself cannot be authorised.