Bank makes me overdrawn?!

joe134

masonic wrote: »

Banks have never and will never credit funds to a customers account before they are received. As anoncol says, you are being ridiculous.

Bank A certainly is relying on receipt of Bank B's money before it credits Bank B's standing order. It is not already there. I suggest you re-read the example above because it is clear that Bank A sends its standing order to Bank B without having received Bank B's standing order.

Are you nort reading it right either?
As I stated, £5k in bank A,send £1k to bank B, leaving £4k
Same from B>A. they are not reliant on receiving any funds, £5k is enough to cover £1k transaction without receiving any.
Banks always debit, before credit, even if credit occurs at the same time as debit.12;01:beer:
Off to re-read, Brief history of time.
Far simpler

masonic

joe134 wrote: »

Are you nort reading it right either?

I'm reading it right.

As I stated, £5k in bank A,send £1k to bank B, leaving £4k
Same from B>A. they are not reliant on receiving any funds, £5k is enough to cover £1k transaction without receiving any.
Banks always debit, before credit, even if credit occurs at the same time as debit.12;01:beer:
Off to re-read, Brief history of time.

Yes, and that's how it has to be.

In a bank transfer, the money must be first debited, then transmitted, then credited to the destination account.

On a train journey, the train must first depart, then travel, then arrive at the destination.

As you say above, this is elementary.

So, let's say it takes 5 seconds for the transfer to take place:

At Bank A
12:00:01 Standing order ref: 1 paid out to Bank B
12:00:06 Standing order ref: 2 received from Bank B

At Bank B
12:00:01 Standing order ref: 2 paid out to Bank A
12:00:06 Standing order ref: 1 received from Bank A

Apodemus

I think my bank determines whether you are overdrawn or not at midnight, so it doesn't matter the sequence of deposits or withdrawals during the day as long as it all balances out in the end. I thought they all worked like that nowadays?

What does bug me, though, is why the automated clearing system shuts down over a bank holiday weekend! I have a pile of transfers set up for the first of each month that won't go until tomorrow!

masonic

Apodemus wrote: »

I think my bank determines whether you are overdrawn or not at midnight, so it doesn't matter the sequence of deposits or withdrawals during the day as long as it all balances out in the end. I thought they all worked like that nowadays?

Most do.

What does bug me, though, is why the automated clearing system shuts down over a bank holiday weekend! I have a pile of transfers set up for the first of each month that won't go until tomorrow!

I sent a load of faster payments around my accounts today, but standing orders would not have been processed (although Tesco will process standing orders on weekends).

joe134

masonic wrote: »

I'm reading it right.


Yes, and that's how it has to be.

In a bank transfer, the money must be first debited, then transmitted, then credited to the destination account.

On a train journey, the train must first depart, then travel, then arrive at the destination.

As you say above, this is elementary.

So, let's say it takes 5 seconds for the transfer to take place:

At Bank A
12:00:01 Standing order ref: 1 paid out to Bank B
12:00:06 Standing order ref: 2 received from Bank B

At Bank B
12:00:01 Standing order ref: 2 paid out to Bank A
12:00:06 Standing order ref: 1 received from Bank A

Cannot disagree with all that.
Here's my first post, and I cannot see where I differ.

If you pay in say, £1k on any day by SO and then have an SO for paying out £1k the same day, they will always take the SO out first, before putting your £1k in at midnight, therefore making you overdrawn .They never pay in, then take out at midnight, always the other way round.

That's why I said stagger payments, unless enough funds are in to cover DD's etc.

I also gave an example of how they caused me to go into the red via cash, 30 years ago.
Technology has changed a lot, but, not the cash situation.
If they can catch you, they will, how else do they make a profit?
Winners and losers.

I just say, beware;:beer:
Happy bank holiday

masonic

joe134 wrote: »

Cannot disagree with all that.
Here's my first post, and I cannot see where I differ.

Here is where you and I differ (my emphasis)

If you pay in say, £1k on any day by SO and then have an SO for paying out £1k the same day, they will always take the SO out first, before putting your £1k in at midnight, therefore making you overdrawn* .They never pay in, then take out at midnight, always the other way round.**

That's why I said stagger payments, unless enough funds are in to cover DD's etc.

I also gave an example of how they caused me to go into the red via cash, 30 years ago.***
Technology has changed a lot, but, not the cash situation.****
If they can catch you, they will, how else do they make a profit?*****
Winners and losers.

I just say, beware;:beer:
Happy bank holiday

* Most banks now do not consider you to have been overdrawn if you clear any nominal overdraft later the same day (e.g with an incoming standing order), so the order of transactions is irrelevant.
** As discussed at length above, the money must first be debited from the source account. When that happens, and when the money is sent is beyond the receiving bank's control, but if all banks process transactions at the same time, then debits necessarily must occur before credits. As above, the order of transactions is not really relevant any more.
*** You caused yourself to go into the red by not waiting for the cash to be credited to your account before making your withdrawal. Did ATMs not have balance checking facilities in those days?
**** Not true because most banks now credit cash deposited at the counter same day if it is received before the cut-off time, and do not consider you to have been overdrawn if you clear any nominal overdraft later the same day. They also retry payments that would otherwise have failed due to insufficient funds - free of charge!
***** You make it sound like banks are being malicious by not processing all transactions instantaneously. It is unreasonable to expect them to do so. Even faster payments take time to process. Banks do not need to "catch you [out]" to make a profit. It seems they are going out of their way to help customers avoid being penalised for these sorts of mistakes.

I can agree that everyone should be aware of how payment systems work. That will prevent them adopting unreasonable expectations and being disappointed when reality differs.

Sammie007

Thank you. Unfortunately it Was a telephone conversation with the insurance company, so it wasn't put in writing, but we've had it before with admiral, and tbh they don't seem to know what one person says is ok to the next. They had 3 weeks to change it,as we told them as soon as we knew I was being made redundant. I'll give them a call and see what they say. I may try cab first. The last time I spoke to the bank they pretty much said tough,and there was nothing I could do about it,except close my account and pay off the £350 overdraft before I did that. Thank you very much guys.

joe134

masonic wrote: »

Here is where you and I differ (my emphasis)


* Most banks now do not consider you to have been overdrawn if you clear any nominal overdraft later the same day (e.g with an incoming standing order), so the order of transactions is irrelevant.
** As discussed at length above, the money must first be debited from the source account. When that happens, and when the money is sent is beyond the receiving bank's control, but if all banks process transactions at the same time, then debits necessarily must occur before credits. As above, the order of transactions is not really relevant any more.
*** You caused yourself to go into the red by not waiting for the cash to be credited to your account before making your withdrawal. Did ATMs not have balance checking facilities in those days?
**** Not true because most banks now credit cash deposited at the counter same day if it is received before the cut-off time, and do not consider you to have been overdrawn if you clear any nominal overdraft later the same day. They also retry payments that would otherwise have failed due to insufficient funds - free of charge!
***** You make it sound like banks are being malicious by not processing all transactions instantaneously. It is unreasonable to expect them to do so. Even faster payments take time to process. Banks do not need to "catch you [out]" to make a profit. It seems they are going out of their way to help customers avoid being penalised for these sorts of mistakes.

I can agree that everyone should be aware of how payment systems work. That will prevent them adopting unreasonable expectations and being disappointed when reality differs.

Nice little Diatribe,..
It all sounds so sincere, the banks are OH so Altruistic.
Regarding your statement;

". Banks do not need to "catch you [out]" to make a profit. It seems they are going out of their way to help customers avoid being penalised for these sorts of mistakes."

Why is it" Every" single High street bank has been fined , for mis-selling PPI;CCPP, Packaged Accounts not suitable for customers needs.etc'etc.the list is endless,if that's not catching you out I don't know what is?

I've been with Hsbc for nearly 60 years ,and I will never change,and have got, A/cs with Every high street bank, Et.al
Hsbc is a good example of excellence isn't it?
It's as bent as a nine bob note.
Barclays Libor rate fixing etc;etc.
LLoyds really took a hammering for their mis selling, and they are still at it.
The list is endless.
Bob Diamond.
Horsey Hester
Fred the Shred Goodwin et.al
Huge bonus's while the banks need bailing out
Another long list of Altruists they are .
If they don't need to rip us off to make a profit, Why do we still own one of them after being bailed them all out?
They all have their own Toxic depts
RBS is so Toxic it's changing it's name to Williams & Glynn.
In the real world they would have gone under for their antics.
My world not yours apparently;

I will accede you know a lot about how banks operate , T'c's etc, and give good advice to posters on this forum , BUT, we will always Differ on this topic, and we have had a few debates in the past.


I think I will stick to my statement," they are a Cartel", out to rip you off at the first chance they can, and you have to beat them at their own game.
Use them, don't let them use you.

Buyer Beware.

As I told the OP, don't take to heart the slights , they are just banter, I've been on here long enough to know.
I hope he gets it sorted out.

Ballard

I have never heard of any bank charging for intra-day overdrafts. To the best of my knowledge they all take the balance at close of business to determine whether any fees or interest are due. Considering the number of transactions appearing throughout the country in any one day it would take a lot of processing power to make the calculations to charge for brief overdrafts during the day.

skyranger

Sorry OP - people rather than help you sometimes will say "Well why did you get yourself in this situation to start with".

It's like arriving at the scene of an accident and instead of helping you, they will stand around and say "Why were you driving in a car that had a fault headlight". Not helpful.

However, I would advise on Callum9999 advise. Also you can take it to one of these 'agony aunt' financial pages you see in newspapers who might take it up for you and argue. If you've got a strong case then you might win. Also state to your bank your financial situation and see if they can arrange something.

An out the box way, is maybe have another bank account set up with a very low % overdraft faciliity that will allow you to take the money out of there to pay this £350, but as long as you pay the new bank back too!