Alliance & Leicester - money paid in but still charged

LyndaP

On 21st August I paid in funds into my account as I realised I could go overdrawn. That day I had one credit item and 3 debit items. One was listed before the credit and I was charged £25 for going overdrawn. I queried this with A&L as the net position on the day was well within my overdraft limit. This is their reply:-

Thank you for your e-mail regarding charges on your account.

Terms and Conditions of your account are that you must ensure that there are sufficient funds in the account at the start of business to cover any items due to debit your account that day.

In conjunction with the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) a number of current account providers have submitted a ‘test’ case, approaching the High Court for a ruling on the complex issue of unauthorised overdraft fees. These fees include paid item, unpaid item and unauthorised overdraft charges.

Following guidance from the Financial Services Authority, Alliance & Leicester along with other banks and building societies are suspending the handling of requests for refunds of charges and complaints until this court case is resolved.

The Financial Services Authority has issued guidelines on how we should manage the ongoing process. In accordance with this, we have forwarded your details to our specialist charging area who will be writing to you with further information on this matter.

I do hope you find the above information useful, however, if you have any further questions or need any more help please visit our ‘Help’ section online or contact us again.

Kind regards

Customer Services
Alliance & Leicester plc

I am furious. Does anyone else have experience of this? The nett position on my statement shows me within the overdraft limit at the end of the day on 20th August and 21st August. What is this about the start of the day, surely it is the net position overall?

The amount in question was a train ticket for £22.30 and the charge was £25.

HELP PLEASE MONEYSAVERS:money:

Edinburghlass_2

This is discussed at least once a week on the Budgeting and Current Account Board so I'll shift this over to there for you.

TwistedPsycho

Yes I have had this problem as well and A&L are quite happy to ignore you.

I transfered money from a linked account to cover a direct debit that was paid over the authorised overdraft, got hit with TWO charges, because they paid a DD over the overdraft limit, and going into an unauthorised overdraft....

That was a £50 charge for a £40 transaction!


As a side note, ona totally different train of thought, be wary of paying in cheques "Just in Time" as well. When I first opened my A&L account they were taking on average 3 days to clear. Now they are taking the full 5 days (which equates to a wek in real terms). I know that you should allow the full 5, but just in case you don't....

Lavendyr

It's something to do with the order in which transactions are processed at the end of the day, apparently (this is what I was told by their call centre). A&L process all debits/purchases first, then credits. So even if you pay in earlier on the same day you pay out, they will process the payment out first.

I asked them about it because I had a similar thing happen - I saw my salary go in, so I placed a couple of online orders which debited my account on the same day. However the next day, I looked at the account again and the debits had been "inserted" in front of the credit, actually pushing me into my overdraft as a result. I wasn't charged because I do have that overdraft for exactly that reason (i.e. as an emergency buffer) so it was within my authorised limit (and was also interest-free), but I was told by their call centre when phoning to find out why, that this is the way A&L process transactions and if I hadn't had the overdraft there I would have been charged.

Best thing is just to make sure you don't spend the money until the day after it shows on your statement. It's annoying, but at least they do tell you that's how they do it. Though I think that they really ought not to show any transactions as "clear" on your statement at all until the day after they've been processed, in order to avoid people thinking that money has been transferred & cleared to the account when it really hasn't.

newlywed

OH had this and was told that even if you get there at 9 am and pay money in, it will be too late as the direct debits etc are taken first thing in the morning.

glitzy

Hi

Sorry to be a stick in the mud but it happened to me, but it was just for £10(hubby took out of cash machine)which meant we didn't have enough for a DD - i got charged £50. On the back of your statement it says "cleared funds must be in your a/c the day before any payments are due to be paid from your a/c". There is a buffer zone of £5 if you dont have an overdraft.

A/L are the worse bank i have been with, they rarely back down.

LyndaP

I used to work for a bank in the "olden days" and I always thought it was the position at the end of the day that would determine any charges - not the position during the day!

Two further items went through after the credit and I have n't been charged for them - so far. I just think it is really unfair and taking advantage.

Thanks though Moneysavers for letting me know I am not alone!

MarkyMarkD

It's not just A&L. This is a general feature of most banks' current accounts.

Money has to be there at close of previous day's business because DDs, cheque clearances, standing orders are all processed first thing in the morning well before branches actually open.

The decision to pay or reject your payments, and to charge or not charge, is made at that time - say at 0200 in the morning.

Paying cash in "on the day" is too late. It's as simple as that.

The few banks which don't charge on this basis have to go back at the end of the day and review all the transactions which they might have bounced/charged for, and allow them to proceed/remove the charges. That's a lot of unnecessary effort in the view of most banks.

There's no reason for A&L to "back down" - it's in their terms and conditions AND on the back of the statements according to glitzy and it's common to most other banks too.

I'm sure that Lynda's right about the "olden days" pre computers, but it is not how things work now.

Lavendyr's suggestion is the most helpful - set up an authorised overdraft which is sufficient to cover any individual day's debits and you will never get charged. Interest IS worked out on the end of day balance so paying cash in/cheque deposits clearing/whatever on the same day as the debits go out is fine for interest calculation purposes.

happygo_2

Exactly the same thing happened to me a few days ago with A&L. My A&L credit card payment was to be made via direct debit from my A&L bank account, i transferred money from the savings to the current account to cover it and then got hit with a 34GBP charge as well as not having my direct debit go through - so i now have to pay interest on the credit card and no doubt pay a charge to credit card as well. I never had a problem with Barclays with doing transfers between accounts instantaneously. I called A&L and they said it takes up to one day for transfers between accounts to be made! They said they would refer my case to the 'reclaim team' and see what would happen.
I talked to A&L credit card customer service to explain and they said its A&L bank's problem and they would charge me. Sigh!

MarkyMarkD

A&L credit cards = MBNA, not A&L, so that response would make sense.

It says in the savings account terms & conditions that transfers aren't instant.

Just because Barclays happen to do it instantly doesn't mean that A&L has to.

Which day did you do the savings account transfer, happygo? If it was on the day of the DD it was obviously too late in any case.

gt94sss2

As others have said, most banks state that funds have to be present at close of business the day before any direct debits/standing orders are due.

The one exception I know is HSBC who will not charge you if you are 'in credit' at the end of a day, even if you have technically been overdrawn at some point that day as part of their 'Fairer Fees' policy which among other things, also says:

• You will not have to pay fees for being overdrawn by £10 or less.
• You will not have to pay more in fees than you are overdrawn by in your charging month, so a £15 overdraft will not cost you £50.
• You will not have to pay a fee for an informal overdraft request if your account is credited with covering funds by the end of the same day.

Last time this was discussed, I think someone said Yorkshire also had a similar policy to HSBC re: end of day balances.

Regards
Sunil