Paragon Bank - sharp practice?

beefturnmail

I have an 'instant access' savings account with Paragon Bank with a current account.

I requested (online) a withdrawal on the afternoon Thursday 1 Feb, however it has taken until just now (c. noon today) for this to appear in my current account.

I think this is in accordance with their t & c (see below), however it appears they have debited my savings account on Fri 2nd Feb and sent it by FPI today. This seems pretty sharp to me - where has the money been sitting (and earning interest!) over the weekend if they have sent it by FPI today? With other similar accounts I've had (with more established banks e.g. Santander) withdrawal has been 'instant' i.e. by FPI from the moment I request it

terms and conditions 4.4. https://www.paragonbank.co.uk/ParagonBank_Viewer/Resources/ParagonBank/Documents/Savings/GeneralTermsandConditions

We’ll transfer money to your Nominated Account or another Paragon Account by the end of
the next Business Day as along as we receive your request before 2pm on a Business Day
– if not; the transfer will be done on the next Business Day.

Keep_pedalling

So what fraction of a penny do you think you have lost?

AirlieBird

beefturnmail wrote: »

I have an 'instant access' savings account with Paragon Bank with a current account.

No you don't. You have an 'easy access' account.

dunstonh

I have an 'instant access' savings account with Paragon Bank with a current account.

Back in the early 90s, a number of banks renamed their instant access requests to remove the word instant. They feared that the anal types that search T&Cs for errors and then kick up a stink about them just for the sake of it would complain about the definition of instant.

They even got one of those anal types taking it to the FOS. However, the FOS rejected the complaint. The word "instant" has made a limited return but the word "easy" is often used in its place. And to this day, you still see the odd FOS complaint go through about the word "easy" or "instant".

"Mr W has complained that a savings account he opened with TSB Bank plc didn’t offer him
the easy access to the money that he required."
<snip>
I do accept that the terms and conditions of the account say that access to the funds is
instant, and no notice period is needed. TSB has explained that this would normally be the
case, but its branches don’t tend to hold such large sums on site. This means that if it
doesn’t have enough cash it needs to order more in. I don’t think this is inherently
unreasonable.

<snip>
For the reasons given above, it’s my final decision not to uphold this complaint. I make no
award against TSB Bank plc.

Yes, that is a real complaint and just one of many from the anal types with nothing better to do. It also cost Lloyds £500 FOS fee. And that means it cost all account holders as the interest rates are set to cover costs and profit.

The first point is that whilst the words can have a definition, the FOS applies common sense to it. The second point is that the OP says he has an instant access account. Yet he/she doesn't. It is called Easy access. Perhaps he/she should pay as much attention to his/her own words as they do to others.

eskbanker

beefturnmail wrote: »

it appears they have debited my savings account on Fri 2nd Feb and sent it by FPI today. This seems pretty sharp to me - where has the money been sitting (and earning interest!) over the weekend if they have sent it by FPI today?

Do you have evidence that the FPI was sent today or just that it arrived today?

As Paragon aren't direct participants of the Faster Payments scheme, their transactions are more likely to be closer to the 'next business day' end of the FP spectrum than the two-hour typical window between direct participants....

beefturnmail

Keep_pedalling wrote: »

So what fraction of a penny do you think you have lost?

About 100/1 actually.

beefturnmail

AirlieBird wrote: »

No you don't. You have an 'easy access' account.

Thanks - you're right - I hadn't noticed this subtle difference. Thanks also to dustonnh - the history is interesting

dunstonh

eskbanker wrote: »

Do you have evidence that the FPI was sent today or just that it arrived today?

As Paragon aren't direct participants of the Faster Payments scheme, their transactions are more likely to be closer to the 'next business day' end of the FP spectrum than the two-hour typical window between direct participants....

I suspect that Paragon act a bit like the old building societies used to (as there is no sort code/account number applied to individual accounts). Some of the smaller ones still do it that way. i.e. the money has to come out of the account holders account, into the firms own client money account and then is transferred to where it needs to go. Perhaps using their bankers to do the transaction. So, it is a staged process requiring a number of hops and just cannot be instant.

beefturnmail

eskbanker wrote: »

Do you have evidence that the FPI was sent today or just that it arrived today?

As Paragon aren't direct participants of the Faster Payments scheme, their transactions are more likely to be closer to the 'next business day' end of the FP spectrum than the two-hour typical window between direct participants....

No I only have evidence that it arrived today - what are the actual time limits on FPS transactions then? - I had always assumed 2 hours as that it was it usually says when you make one - e.g when doing via internet banking you get some sort of mesasge, saying 'we have completed your transaction, funds should be available in you account up to 2 hours from now' - this is just from memory though, so I could well be wrong

eskbanker

beefturnmail wrote: »

what are the actual time limits on FPS transactions then?

http://www.fasterpayments.org.uk/faqs confirms that:

As a minimum, all financial institutions in the UK must abide by the Payment Services Directive (PSD) - this states that any payments made by mobile, internet or phone banking (including standing orders) must arrive by the end of the following business day at the latest.

although it also clarifies that:

Provided the sending and receiving bank/building society are Direct Participants of Faster Payments, payments are usually available almost immediately, although they can sometimes take up to two hours.

Hence my clarification that Paragon aren't direct participants and therefore you can only really expect their transactions to complete by the end of the next business day, i.e. today for yours, even though you're far from alone in erroneously expecting the higher standard for all FPs....

AirlieBird

dunstonh wrote: »

I suspect that Paragon act a bit like the old building societies used to (as there is no sort code/account number applied to individual accounts). Some of the smaller ones still do it that way. i.e. the money has to come out of the account holders account, into the firms own client money account and then is transferred to where it needs to go. Perhaps using their bankers to do the transaction. So, it is a staged process requiring a number of hops and just cannot be instant.

I think it is more than 'act' like an old building society. The savings operation is outsourced to Newcastle Building Society using their systems as a number of the savings bank divisions of these finance companies are.