Charges incurred due to funds not arriving re. bank holiday

Bobby101_2

1st post so Hi

I hope you are able to help or advise..my scenario is this:

I am with Lloyds TSB and have a direct debit set to leave my account on the first of every month.
My lodger (who is with the co-operative) has a direct debit setup to credit my account for the first of every month.

I checked my account this morning and the direct debit I had set to go out on the first of the month had been taken this morning, but the funds from my lodger had not been credited to my account. Due to the funds from my lodger not arriving in my account and the direct debit being taken I have now gone overdrawn in my account and will be charged.

My lodger has checked her account with the co-operative and has confirmed that the funds due to me on the first have been removed from her available balance.

My question is who should be liable for paying the bank charges I have incurred due to their being inadequate funds in my account to cover my direct debit.

My feeling is that the co-operative should be reimbursing me as my lodger has an agreement with the co-operative to pay the funds into my account on the first of the month, and if the first of the month happens to fall on a weekend or a bank holiday then then funds should be paid into my account by the co-operative on the next available working day..i.e today.

If the funds from my lodger had arrived from the co-operative this morning then there would have been adequate funds in my account to cover my outgoing direct debit and no charges would have been incurred.

Any help appreciated!

Thanks

dunstonh

My lodger (who is with the co-operative) has a direct debit setup to credit my account for the first of every month.

Are you sure its a direct debit? I would expect it to be a standing order.

but the funds from my lodger had not been credited to my account.

which you would expect as the 1st was not a working day. Indeed, it would have only left the account today.

My question is who should be liable for paying the bank charges I have incurred due to their being inadequate funds in my account to cover my direct debit.

You are liable for the charges as you incurred them. However, whether you want to attempt to reclaim them from your lodger is up to you. That will largely depend on how much you want to create issues.

My feeling is that the co-operative should be reimbursing me as my lodger has an agreement with the co-operative to pay the funds into my account on the first of the month, and if the first of the month happens to fall on a weekend or a bank holiday then then funds should be paid into my account by the co-operative on the next available working day..i.e today.

The Co-op have done exactly what they should have done. i.e. debit the account on the 1st of the month or the next working day should the 1st not be a working day.

Basically, your problem is that you were running your account too close to the limit without sufficient funds to cover your transactions and with the lodget having 1st monthly on the standing order and you relying on that money arriving straigth away was just trouble waiting to happen. It could have happened in any month where the 1st was a weekend. I suggest you ask your lodger to adjust the standing order date to something like the 24th of the month if you are unable to fund your 1st of the month payments.

noh

Your lodger has a standing order not a DD set up to pay you.
You are correct that the Coop will pay the funds on the 1st or the first working day after if the 1st is a non working day. This they have done.
There is no guarantee that the payment will reach your account on the same day.
The Cooperative bank do use faster payments for standing orders which should ensure same day transfers but they do not guarantee that.

Bobby101_2

Hi, and thanks for the responses

Yes it is a standing order..my mistake.

When the standing order was set up with the co-operative should they not have advised me that if the day the standing order was due to be paid was a public holiday or a weekend that it would be not be able to be honored on the agreed date. Had they done this then I would have considered the standing order date more carefully.

noh

Bobby101 wrote: »

Hi, and thanks for the responses

Yes it is a standing order..my mistake.

When the standing order was set up with the co-operative should they not have advised me that if the day the standing order was due to be paid was a public holiday or a weekend that it would be not be able to be honored on the agreed date. Had they done this then I would have considered the standing order date more carefully.

The Co op bank has no contractual relationship with you so they are not obliged to advise you of anything.
Your lodger who is the account holder should already be aware of these conditions as they are detailed in their account terms and conditions.
Specifically paragraphs 5.1 5.2 and 5.3 of:-
http://www.co-operativebank.co.uk/cfscombi/pdf/current_account_terms_and_conditions.pdf

As dunstonh said in his post if you want to be absolutely sure that the payment will always reach your account by the 1st it needs to be set up to leave your lodgers account around the 24th.

Premier_2

dunstonh wrote: »

... I suggest you ask your lodger to adjust the standing order date to something like the 24th of the month if you are unable to fund your 1st of the month payments.

That is normally good advice, but in this particular, unique instance would also have probably failed.

24th April was Easter Sunday
25th April Bank Holiday Easter Monday

So the amount would not leave the account until Tuesday 26th April.

Normally this would still be ok as it would usually then be credited Friday 29 April.

However this year was a special bank holiday on 29 April, and with another on Monday 2nd May, then funds would not be credited until 3rd May.

Term 8.1 suggest this is too late as cleared fund sneed to be available before 9pm the previous day.

So in this case, the SO need to be set to pay on the 22nd.

(I used to work to the 23rd as a safe date following an issue with the 31st Dec 1999 being made a bank holiday - but this year's holiday dates now brought that forward another day)