MSE News: Customers being 'ripped off' by banks on Faster Payments limits

martyn2000

I have just spoken to my bank Santander and they will not allow me to transfer 4 amounts of £95000 by Faster Payments on the same day to facilitate the purchase of a property. However they will allow the transfer for a CHAPS payment of £25. Are they correct?

Archi_Bald

martyn2000 wrote: »

I have just spoken to my bank Santander and they will not allow me to transfer 4 amounts of £95000 by Faster Payments on the same day to facilitate the purchase of a property. However they will allow the transfer for a CHAPS payment of £25. Are they correct?

Sounds about right. Though you could "faster payment" 4 x £95K (or 3 x £100K, followed by 1 x £80K) on 4 consecutive days to save £25.

If you opt for the faster payment option, expect that the Santander AML procedures will kick in and all of the payments will be delayed to probably the next working day. Talking to them beforehand might eliminate the delays on the individual payments but won't raise the daily max on Faster Payments.

The question is whether doing away with a 4-8 day wait and other inconvenience is worth £25 to you, when you want to secure a property of over fifteen thousand times the value of the cost of a single, painless, same-day CHAPS transfer.

Pincher

I seem to remember you can clear a cheque on the same day for a fee. Personally, I would just write a cheque, hand it over to the solicitor's secretary, and let her get on with it.

Archi_Bald

Pincher wrote: »

I seem to remember you can clear a cheque on the same day for a fee.

Doesn't make sense. No bank would clear a cheque until they have actually confirmed with the issuing bank that the funds are actually available. That's done using the 2-4-6 clearing cycle.

Pincher wrote: »

Personally, I would just write a cheque, hand it over to the solicitor's secretary, and let her get on with it.

that's another option to save the £25 or so for a CHAPS payment. But don't expect same day completion - a cheque remains subject to the 2-4-6 clearing cycle.

WestonDave

To be fair to "Pincher" there used to be something called "special clearance" and solicitors would take cheques on that basis with faster clearance. However when it became known that all you were getting for your fee was them posting it first class back to the issuing bank rather than it going second class, and that it was still subject to the then random vagaries of the clearance system (pre 2-4-6) most firms stopped accepting cheques on that basis. Once 2-4-6 came in it became irrelevant. Prior to that it was a nightmare - you could wait a week, assume it was cleared and then get it bounced because there was no defined point at which it was "safe". Now at least the rules mean that by day 6 if it hasn't bounced it can't be.

System

My Solicitors were happy to receive funds by FP, BACS, CHAPS and only very reluctantly by cheque.

But would only issue funds to me by cheque or CHAPS (for a fee).

Archi_Bald wrote: »

Doesn't make sense. No bank would clear a cheque until they have actually confirmed with the issuing bank that the funds are actually available. That's done using the 2-4-6 clearing cycle.

that's another option to save the £25 or so for a CHAPS payment. But don't expect same day completion - a cheque remains subject to the 2-4-6 clearing cycle.

Pincher

Heng_Leng wrote: »

My Solicitors were happy to receive funds by FP, BACS, CHAPS and only very reluctantly by cheque.

They were reluctant the last time I did it as well.


They expect me to jump when they call, have money sitting around earning no interest, just so they don't have to be responsible for the money for one minute.


I don't mind my money sitting in the solicitor's account for a few days, paying no interest, so using BACS or wait a few days to clear a cheque is no problem to me. It's a problem with the solicitor.


Fortunately I was never in a chain, but if anything should go wrong, like the bank's computer going down, it's all MY fault for the chain collapsing, I'll bet.

System

It never cleared the cheque faster, it was just that it made payee's bank aware that the cheque was coming (via the phone) and the cheque was sent individually.

I usually had the effect of making it bounce quicker, if that was going to happen.

WestonDave wrote: »

To be fair to "Pincher" there used to be something called "special clearance" and solicitors would take cheques on that basis with faster clearance.

System

I'm slightly confused. This is off Yorkshire BS under faster payments: "The only difference you'll be aware of (other than the quicker arrival at the receiving bank) is what happens to payments above £100,000. There is an overall transaction limit of £100,000 under the Faster Payments scheme. So, if you request an electronic transfer above this amount, it will be sent as more than one payment."

So if request 120k as faster payment, they will send 100k and 20k as 2 separate payments under FP. No mention of CHAPS. Unless YBS are the exception - they are of course a BS not a bank!

colsten

MSE wrote:

CHAPS payments will have to be used if you need to send more money that your bank's Faster Payments limit.

This isn't correct either. You do not have to use CHAPS. You might be able to make several Faster Payments (I have done this myself at FD and Nationwide), or you can spread your payments over several days, or you can write a cheque, or you can use your debit card (which I have also done for over £80K at one point. Though not over £100K - and I wouldn't have more than £85K in any one of my bank accounts anyway)

For the latter, the recipient obviously needs to be able to accept debit card payments, you need to have advised your bank beforehand, and your bank will want to speak to you at the time of the transaction. Which all sounds fair enough, as you wouldn't really want anyone to remove several hundred K from your bank account by debit card, would you. It is free of any charge though