Lloyds are about to charge me!

munk

Sorry to drag this up but I'm in a similar situation.

I banked a cheque into my lloyds current a/c on 28th August which showed up immediately on my account balance. I then set up a standing order that evening to transfer the money over to a high interest savings account presuming that the funds would be available since it had been credited to my account balance. A couple of days later I received a letter informing me there were insufficient funds available to make the transfer and I would be charged £35 within 2 weeks.

I take the point made above by various people about 'available funds' vs 'account balance' totals and understand the concept of the clearing system taking up to 5 days for a cheque to clear, but I was under the impression that when a cheque is banked the funds don't show up on your balance until it does in fact clear - is this not the case?

The automated letter the bank sent out seems to highlight this 'glitch' - to quote the letter:

We haven't been able to make the payment you arranged to come out of your account today. ... If we had paid it your account would be £941.58 in credit.

If I was going to be £941.58 in credit surely there's no need to charge me for it! Maybe this is a glitch in their automated letter system, perhaps they meant to say 'your account would be (available funds - transfer amount)' instead of (account balance - transfer amount) which is the figure they seem to have used.

I've written a reasonably polite letter to the bank about it requesting they kindly reconsider the charge. No other charges have been levied on the account, so hopefully they'll let me off this one otherwise I guess I'll have to join the queue to claim the money back via the FOS or small courts.

Cheers.

tom188

Log onto LTSB internet banking

Click on your current account

"Your Account details"
Account Balance xxx
Available Balance yyy
Overdraft Limit zzz

Your balance is adjusted when you pay in.
Your available balance is adjusted when you can use the money.
If you use the money before it clears and becomes available for you to use you get charged - I think the process is pretty clear.

dunstonh

I banked a cheque into my lloyds current a/c on 28th August which showed up immediately on my account balance. I then set up a standing order that evening to transfer the money over to a high interest savings account presuming that the funds would be available since it had been credited to my account balance. A couple of days later I received a letter informing me there were insufficient funds available to make the transfer and I would be charged £35 within 2 weeks.

I take the point made above by various people about 'available funds' vs 'account balance' totals and understand the concept of the clearing system taking up to 5 days for a cheque to clear, but I was under the impression that when a cheque is banked the funds don't show up on your balance until it does in fact clear - is this not the case?

Lloyds show the cheque instantly (as do most banks) but dont let you draw against it unless you have an authorised overdraft.

You presumed wrong. If you havent gone overdrawn like this before, then Lloyds will usually refund it as a goodwill gesture if you ask them to.

munk

Thanks for the replies.

All I wanted confirmed was whether a cheque banked would show up immediately on my balance. In my experience in the past when I've banked a cheque I'm sure the money hasn't been credited to my account until the cheque has cleared - perhaps I'm wrong or perhaps there are different types of cheque deposits - for example this was a cheque made out from a building society, no idea if that has any bearing on things.

We will see what the response is to my letter. I'm hoping I've not worded it too strongly now, I did emphasize the fact that the only reason I set up the transfer was because as far as I could tell from the account balance (yes, tom188, not the 'available' balance!) I had sufficient funds available to proceed with the transfer. It was somewhat of a mix up really, I didn't bank the cheque, someone else did and when I saw the statement entry 'DEP £x' I didn't immediately realize it was a cheque and just presumed (incorrectly) the money was ready to move. Will check the 'available balance' on the account summary page next time @ lloyds online.

Thanks again.

jamesd

munk, depends on the bank but it's common. Best thing you can do really is to arrange an overdraft sufficient to cover situations like this. Say a couple of months of salary worth so you can move around that much without risk of charges. Assuming you don't use the overdraft for routine borrowing, that is.

dunstonh

All I wanted confirmed was whether a cheque banked would show up immediately on my balance. In my experience in the past when I've banked a cheque I'm sure the money hasn't been credited to my account until the cheque has cleared - perhaps I'm wrong or perhaps there are different types of cheque deposits - for example this was a cheque made out from a building society, no idea if that has any bearing on things.

I started my working life at Lloyds 20 years ago and cheques were credited then straight away but shown as uncleared. That was on all accounts. It isnt something new.

mrcow

tom188 wrote: »

Log onto LTSB internet banking

Click on your current account

"Your Account details"
Account Balance xxx
Available Balance yyy
Overdraft Limit zzz

Your balance is adjusted when you pay in.
Your available balance is adjusted when you can use the money.
If you use the money before it clears and becomes available for you to use you get charged - I think the process is pretty clear.

Nope.

I've been a Lloyds internet customer since they started it and this is always the way it has worked.

But.......

Last week I paid a large check into my account and the "available balance" was adjusted immediately along with the account balance.

There is either a glitch on it, or they have deliberately adjusted the way the balances are viewed.

YorkshireBoy

mrcow wrote: »

Last week I paid a large check into my account and the "available balance" was adjusted immediately along with the account balance.

Was this a cheque drawn on another LTSB account?

mrcow

Yes it was. (Not my branch though).

Is that what the difference was then?

If so......can I spend the money now then?

YorkshireBoy

mrcow wrote: »

Yes it was. (Not my branch though).

Is that what the difference was then?

From the LTSB 'ask a question' help files...

You asked us:
What is the process for crediting and clearing cheques?

Our answer is:
When you pay in a cheque it will usually appear as a credit on your account that same day. It will start earning, or reducing, the interest on your account two working days after that. For personal interest bearing current accounts on the working day you pay in your cheques of up to £1000 we'll pay you any interest you're due on them or use it to reduce any interest you are paying on money you owe us (an overdraft for instance). And you will be able to use the money, or withdraw it, once the cheque has cleared - which is normally by the third or fourth working day after you pay it in (excluding the actual day you pay it in). The exact time it takes for a cheque to clear depends on whether it comes from a Lloyds TSB account or from a different bank.

If you write a cheque to someone, it will normally take two days for the money to be deducted from your account, excluding the day it's paid into their account You'll need to make sure that you have enough money in your account to cover the cheque at the time you write it because sometimes the cheque may clear faster, for example, if it's paid into another Lloyds TSB account.

http://lloydstsb.creativevirtual.com/LloydsTSB/TSB.exe

If so......can I spend the money now then?

If it's "available", then yes.