Bouncing payments when funds are available

Island_Mike

As I'm new in this forum, my apologies if this has already been covered. I have a business account with BOS and use online banking. If payments on a particular day take me over my limit, the bank bounces all payments set for that day and charges me £35 each. This means that virtually every time it happens they charge me £100 (more than that but they have to repay the excess). Is this legal? Today, for example they bounced three payments, but there were sufficient funds in the account to cover two of them. There won't be, however, when they have removed 3 x £35.

Premier_2

It is entirely legal - but I don't understand why they are bouncing all three transactions. If you don't understand, ask the bank to explain.
Either way, post the details here.

The charges are as specified in the terms and conditions/tariff of charges you agreed to.

The bank should not (baring any exceptional circumstances such as possible fraudulent activity) be refusing to carry out the transactions you have authorised when there is sufficient cleared funds in place to honour those transactions.

Note that each transaction will be processed in order (and you can't tell what order that will be).

e.g. say you have £100 cleared funds in your account.

Then three authorised withdrawal transactions that day arrive as follows:

£90 - paid (leaving £10 balance)
£35 - bounced due to insufficient cleared funds
£25 - bounced due to insufficient cleared funds

This would leave you with 2 unpaid item charges

If however, for example they arrive in the reverse order

£25 - paid (leaving £75 balance)
£35 - paid (leaving £40 balance)
£90 - bounced due to insufficient cleared funds

This would leave you with just 1 unpaid item charge.

What I mean is the bank do not pay the transactions in a way that will minimise or maximise your charges, only to process them in order.

Charges are typically not applied until the following month after notice has been given, but check your own terms to ensure this is the case with you. Therefore the application of charges to any transactions not able to be paid this month should not affect the ability to make those transactions.

Island_Mike

I shall ask the bank and post their reply, but I have learned to expect nothing from them. Items due on a particular day are all applied on the instant of midnight and on each occasion all have been bounced. So I am, therefore, either very unlucky or all items are applied simultaneously as a total and bounced as a total.

For the first twently years or so that I was with this bank and we had a series of business managers in our local branch, the de facto deadline for moving funds about to meet commitments on a particular day was close of business. With online banking, this gave me the opportunity to move funds between accounts and prevent any bounced payments. A year ago last October, the business manager was removed and we have to deal with a call centre. With no warning, the deadline became midnight at the beginning of the day. The bank says those are the rules and their managers were breaking them, so it's not their fault. As I know from other businesses at FSB meetings, the bank pocketed a fortune in this manner at that time.

Melly31

Island_Mike wrote: »

I shall ask the bank and post their reply, but I have learned to expect nothing from them. Items due on a particular day are all applied on the instant of midnight and on each occasion all have been bounced. So I am, therefore, either very unlucky or all items are applied simultaneously as a total and bounced as a total.

For the first twently years or so that I was with this bank and we had a series of business managers in our local branch, the de facto deadline for moving funds about to meet commitments on a particular day was close of business. With online banking, this gave me the opportunity to move funds between accounts and prevent any bounced payments. A year ago last October, the business manager was removed and we have to deal with a call centre. With no warning, the deadline became midnight at the beginning of the day. The bank says those are the rules and their managers were breaking them, so it's not their fault. As I know from other businesses at FSB meetings, the bank pocketed a fortune in this manner at that time.

That really is terrible, I'd def complain to the financial ombudsman, may not get you anywhere but surely they can't just change the rules & start changing things around, its not your fault that the manager was understanding, however nice he was, you were mislead into thinking that this was the norm, surely this was the banks fault for not training thair staff adequately?

Premier_2

Melly31 wrote: »

... I'd def complain to the financial ombudsman, may not get you anywhere ...

It won't, at least not until the complainant has exhausted the bank's own internal complaints procedure

Island Mike - have you contacted the bank yet and if so, what did they say?