Banking law - do customers have a duty to check bank statements?

lissa_23

I know it's not advisable to not check your bank statements, but I seem to remember from my days studying banking law that customers do not have a duty to check their bank statements. Therefore, if you don't notice a regular payment going through your account that is an error, the bank has to refund you and they can't use the excuse that you should have checked your bank statements regularly. Is this still correct?

YorkshireBoy

Most (all?) bank account T&Cs will include a clause that you must check your statements regularly, and of course you agree to do this when you sign on the dotted line.


However, there is some (time limited) comeback for the customer if they don't, and this is covered under Reg 59 - (1) of the Payment Services Regulations.

lissa_23

I thought that too, but I've been looking at Barclays terms and conditions and it doesn't say it there. Maybe because they can't put in a clause that overrides banking law?

YorkshireBoy

lissa_23 wrote: »

...I've been looking at Barclays terms and conditions and it doesn't say it there.

Yes it does...


http://www.barclays.co.uk/cs/Satellite?blobcol=urldata&blobheadername1=Content-Type&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobheadervalue2=attachment%3B+filename%3D536%2F392%2Ftermsandconditionsforpersonalcustomers.pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1260091930590&ssbinary=true (page 14)

EarthBoy

"Information about payments into and out of your account is always available to you through online banking (including our smartphone app), telephone banking or by asking in a branch or using an ATM. ....
In addition, we will put the same information on regular statements we will provide or make available to you (including through online banking), ..... You must check the information we give you and must tell us as soon as you can if something is wrong or a payment has gone wrong."

pmduk

Perhaps relevant to your OP are the decisions made by the Financial Ombudsman that it is unreasonable to expect a bank to refund transactions that should have been reported in error a considerable time ago. Offhand I can't remember the time period for certain, but 13 months springs to mind.

Buzby

Isn't it strange that commonsensical sense appears to be the first casualty? A court would look upon a complainant who admitted not checking his statements to being if not complicit in the loss, at least bring irresponsible which would directly affect any compensation due.

antrobus

lissa_23 wrote: »

I know it's not advisable to not check your bank statements, but I seem to remember from my days studying banking law that customers do not have a duty to check their bank statements. Therefore, if you don't notice a regular payment going through your account that is an error, the bank has to refund you and they can't use the excuse that you should have checked your bank statements regularly. Is this still correct?

As far as I'm aware.

Google says the leading cases are:-

Greenwood v Martins Bank (1933)
Tai Hing Cotton Mill Ltd v. Liu Chong Hing Bank Ltd (1986)

Of course, they were arguing about cheques in those days, but the same principle applies to other payment methods.

antrobus

Buzby wrote: »

Isn't it strange that commonsensical sense appears to be the first casualty? A court would look upon a complainant who admitted not checking his statements to being if not complicit in the loss, at least bring irresponsible which would directly affect any compensation due.

In the past the courts have held that customers have no duty to check statements and identify unauthorised payments. You might well hold the opinion that 'common sense' tells you otherwise, but that doesn't change the law.

[Deleted User]

I think Judge Judy would see it differently.

Fran.Guester

all banks now have online banking/mobile apps/better opening hours. to avoid something like this just use all the means available and check them regulary.