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Barclays 'Cleared Funds' handling - Is it legal?
persecuted-citizen
Posts: 20 Forumite
There are two different scenarios that both work in Barclays favour when it comes to paying money in. ‘Cleared funds’ and ‘Account Debits and Credits’
Firstly, Barclays terms and conditions say:
“Cleared funds and cut-off times in Online Banking.
If you deposit cash at a branch after 3.30pm-4pm, the funds will appear on your statement and reflect in your balance the same day in Online Banking.
These funds, however, are NOT cleared funds and will not be available until the following working day. If the funds are transferred out of the account before then, you may incur charges to your account”
In other words, even if CASH has been deposited into the account, they can impose charges for withdrawing the cash or paying direct debits etc out of your account whilst you do not have a ‘cleared’ balance. This is particularly awkward if the money is paid in on a Friday and you need to use some of it over the weekend, or have direct debits due to come out the next working day!
In effect what they are saying is that the money you deposited belongs to them, not you, until it is cleared!
I personally contest that the funds are cleared as soon as the cashier takes the cash from you and enters it onto your account screen! It’s that simple! What else needs to be done to clear it?
If from this point onwards the bank’s system cannot recognise an accounts true balance it is not the account holder who should be persecuted but the bank who should accept the latency of their system and immediately amend any automatic charges imposed on the account.
But No. Wait a minute! I believe there is an obvious reason for this!
The result from this clever t&c is that any money subsequently taken out of that account is being taken from the previous days cleared balance, not the true balance, and if you do not have the funds to cover it you will either;
a. Go overdrawn incurring charges,
b. Enter their ‘Personal Reserve’ agreement incurring a £22 usage fee (A massive <114400% interest rip-off *) or,
c. Have your direct debits returned unpaid and they’ll charge you £8 each for the privilege of doing this.
For Barclays it’s a WIN or WIN or WIN situation.
Furthermore, Barclay’s policy of not crediting the account until all of the debits have been paid out also compounds and clearly creates an artificial deficit to that account in their favour because it generates charges at £8 a time for any unpaid items.
Not to mention the resulting financial consequences that unpaid direct debits and cheques can have, such as incurring additional late penalty fees etc and negative credit scores.
I question that these practices are wholly illegal and I am personally making the Financial Ombudsman well aware of this.
We need more people complaining directly to the ombudsman about Barclays clearing practices, as well as their ‘easy trap high interest overdraft charge’ that they renamed as a ‘Personal Reserve’ service, and also their method of debiting accounts before crediting them.
Yes we all have the option to use other banks, but come on … Barclays are supposed to be the pinnacle of British Banking, or are they just one of the many rogue traders in rip-off Britain today because they are clearly preying on the vulnerable.
Yours truly
A very persecuted citizen
* Staying at £1 inside the ‘Personal Reserve’ for a year will cost £22 x 52 weeks = £1144 = 114400% interest. Surely a record interest rate for what is just a glorified unauthorised overdraft!
Firstly, Barclays terms and conditions say:
“Cleared funds and cut-off times in Online Banking.
If you deposit cash at a branch after 3.30pm-4pm, the funds will appear on your statement and reflect in your balance the same day in Online Banking.
These funds, however, are NOT cleared funds and will not be available until the following working day. If the funds are transferred out of the account before then, you may incur charges to your account”
In other words, even if CASH has been deposited into the account, they can impose charges for withdrawing the cash or paying direct debits etc out of your account whilst you do not have a ‘cleared’ balance. This is particularly awkward if the money is paid in on a Friday and you need to use some of it over the weekend, or have direct debits due to come out the next working day!
In effect what they are saying is that the money you deposited belongs to them, not you, until it is cleared!
I personally contest that the funds are cleared as soon as the cashier takes the cash from you and enters it onto your account screen! It’s that simple! What else needs to be done to clear it?
If from this point onwards the bank’s system cannot recognise an accounts true balance it is not the account holder who should be persecuted but the bank who should accept the latency of their system and immediately amend any automatic charges imposed on the account.
But No. Wait a minute! I believe there is an obvious reason for this!
The result from this clever t&c is that any money subsequently taken out of that account is being taken from the previous days cleared balance, not the true balance, and if you do not have the funds to cover it you will either;
a. Go overdrawn incurring charges,
b. Enter their ‘Personal Reserve’ agreement incurring a £22 usage fee (A massive <114400% interest rip-off *) or,
c. Have your direct debits returned unpaid and they’ll charge you £8 each for the privilege of doing this.
For Barclays it’s a WIN or WIN or WIN situation.
Furthermore, Barclay’s policy of not crediting the account until all of the debits have been paid out also compounds and clearly creates an artificial deficit to that account in their favour because it generates charges at £8 a time for any unpaid items.
Not to mention the resulting financial consequences that unpaid direct debits and cheques can have, such as incurring additional late penalty fees etc and negative credit scores.
I question that these practices are wholly illegal and I am personally making the Financial Ombudsman well aware of this.
We need more people complaining directly to the ombudsman about Barclays clearing practices, as well as their ‘easy trap high interest overdraft charge’ that they renamed as a ‘Personal Reserve’ service, and also their method of debiting accounts before crediting them.
Yes we all have the option to use other banks, but come on … Barclays are supposed to be the pinnacle of British Banking, or are they just one of the many rogue traders in rip-off Britain today because they are clearly preying on the vulnerable.
Yours truly
A very persecuted citizen
* Staying at £1 inside the ‘Personal Reserve’ for a year will cost £22 x 52 weeks = £1144 = 114400% interest. Surely a record interest rate for what is just a glorified unauthorised overdraft!
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Comments
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The solution is to deposit the cash before 3.30 simple really
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bengalknights wrote: »The solution is to deposit the cash before 3.30 simple really
Yes. You are right.
But I know I have just missed the cut-off point many times because of traffic, and sometimes you do not know if you've passed the cut off point unless you ask because all branches are different.
My argument is if they've got your cash then its in your account to use without getting fined!0 -
But it's not in your account, you've missed the cut-off time so credits won't be posted to your account in that day's batch run (which is the ultimate reconciliation process). Most, if not all banks work this way. Until they make the massive investment that real-time systems would require it's not going to change.0
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But it's not in your account, you've missed the cut-off time so credits won't be posted to your account in that day's batch run (which is the ultimate reconciliation process). Most, if not all banks work this way. Until they make the massive investment that real-time systems would require it's not going to change.
So even though the bank has your cash, and it is showing up on your online banking statement as a credit for that days balance, you are saying that it's not in the account because it would be too late for that days batch run !!??!! :think:0 -
The joy of banking is that different banks have different terms and conditions.
If you don't like how Barclays do it, go to Halifax (who's Reward account basically allows you to pay in up to 11.59pm).
If you don't like Halifax's overdraft charges, go to HSBC who charge differently.
Come on, it's because you didn't leave early enough even though you knew there was a risk of traffic.I have just missed the cut-off point many times because of traffic
Barclays is not to blame for the traffic.0 -
opinions4u wrote: »If you don't like how Barclays do it, go to Halifax (who's Reward account basically allows you to pay in up to 11.59pm).
So if Halifax can do it why can't Barclays!opinions4u wrote: »Come on, it's because you didn't leave early enough even though you knew there was a risk of traffic.
Barclays is not to blame for the traffic.
:rotfl:Thats what the bank said ! :rotfl:
But seriously, all I am saying is that the banks are making money out of us by saying that there is no money in the account when clearly there is.
By taking out the debits first before paying in the credits creates an automatic deficit in the account, and they prey on it.
Before bouncing any payments and direct debits they should first look at the account to see if there are any credits in it!!
Just like the ruling on the order that credit card debt should be paid off, there should be a ruling for banks that all credits are paid into an account before the debits are taken out.0 -
You could aks other questions like why can't Barclays pay £5 a month to the customer for having the account?persecuted-citizen wrote: »So if Halifax can do it why can't Barclays!
Or why do Halifax charge so much for overdrafts?
Or why does Halifax have fewer branches than Barclays?
Or why does Halifax have savings rates that are superior to Barclays?
They're different. You pay your money, you take your choice.
Don't ask them all to be the same.0 -
opinions4u wrote: »You pay your money, you take your choice. Don't ask them all to be the same.
Come on opinions4U I’m not saying all banks should be the same I am saying that there is a major scam in the way that the banks make money through the way they handling our money.
Okay if you are rich enough to have money in your accounts at all times, but certainly for me, and the majority of the working class, we work on a day-to-day basis of keeping in the black.
Just because it is standard practice with most banks to take out the debits before putting in the credits then you are saying we should accept it? In the UK we are all like sheep, we have been for years, we need to lobby the authorities to change this system.
Either you are totally missing the point or perhaps you are batting for the bank’s side here?
.0 -
No sh*t Sherlock !!!
Just look at it like this, you post your cash through the door of your local Barclays branch 1 minute past their closing time. You can't get at your money until they open next morning. Simple.
Yes, they are making money, thats how businesses make a profit, they're not in it for the scenery.0 -
So ‘rb10’ ‘Svenena’ ‘opinions4u’’meer53’ etc, You all support the debit before credit system?
That makes me wonder who you are?0
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