Lloyds TSB made a mistake on my acc. balance

pani_2

A customer of mine sent me a CHAPS transfer and put the wrong name on the payment so it was not likely to clear and credit my account.

I called my bank on the day it should have arrived (last Friday) to let them know of the problem (I knew the problem because my customer told me a few hours after they sent the same day payment) and told them the situation.

Lloyds TSB said we can't tell you if it rejects or not today (Friday), but if it is in your account on Saturday then it has cleared.

I called saturday and my account balance had increased by the value of the receipt. I asked the operator if it was a cleared balance and they confirmed it was.

I withdrew cash Monday morning, more than I had in my account before the CHAPS payment had arrived, but as it had arrived I withdrew a large amount of money. I also paid my suppliers by cheque including VAT for Customs... The bank gave me cash without issue - obviously I had the money (and my overdraft limit is £0).

Later in the day I make a transaction at a shop on my business debit card and it wasn't authorised, and based on the CHAPS payment that was cleared in my account Saturday and Monday morning it should have easily cleared.

I called the bank and they tell me they sent the receipt back. I said but it was a cleared payment and they said but the information on the receipt was incorrect so we had to send it back. I repeated that it was cleared on Saturday and earlier today, and cleared means cleared when using CHAPS.

If it wasn't then solicitors couldn't rely on CHAPS payments for completing on houses and all sorts of things.

Still they wouldn't have it and said tough luck. I asked for an overdraft (as I never use one normally) then they said no because I hadn't been with them long enough. I said but clearly what has happened is wrong, and I'm going to end up with loads of bounced cheques here, and charges, and you must be at fault.

I also pointed out if it was cleared how come I could take cash out on that balance? They kept saying this wasn't there fault.

So today I started receiving Lloyds bank charges for unauthorised overdraft usage on the money I took out in cash on Monday morning and here we go again.

I will ask them to refund it all of course because I guess from reading these forums on bank charges I have the right to do that anyway, as it seems like they can't really charge on these penalties. Am I right or barking up the wrong tree here?

Also does anyone know what 'cleared' means on a bank account? Doesn't it mean its yours? If this was a cheque I would understand you should wait several days and seemingly if you look around on the net you'll find cheques can be recalled months later for certain reasons.

But CHAPS is a secure guarenteed cleared payment, and as it was on my account balance, and as I was told by more than one person at the bank it was really cleared isn't there something I can do??

It just seems so wrong, and now I'm overdrawn, with several thousand pounds of cheques bouncing probably tomorrow, and as far as I can tell I've not done anything wrong!! In fact I waited for a real cleared balance, and paid with money I had - I wasn't sending cheques out without funds to clear them.

Someone please tell me if I'm right or wrong. I'm going mad. And of course the bank have basically said stuff you its not our problem.

Its completely stressing me out and this is a new business venture which is going well up to now. As it happens it took 48 hours for that money to go back to my client, who are now trying to send it again with the correct details.

Regardless of the details of the first receipt, if Lloyds had said, I'm sorry we sent it back because the transfer was incorrect I would have been fine, I wouldn't have withdrawn cash, and I wouldn't have written cheques. But they said it was cleared. I'm going around in circles. Any advice?

Edinburghlass_2

I'm surprised Lloyds would say the payment would be cleared on a Saturday but I'm sure someone here will be able to tell you.

ShelfStacker_3

Edinburghlass wrote: »

I'm surprised Lloyds would say the payment would be cleared on a Saturday but I'm sure someone here will be able to tell you.

Lloyds clear things on odd days and at odd times. They've cleared my pay in the middle of Sunday morning before. I wouldn't be entirely surprised by a payment clearing on a Saturday.

dunstonh

Lloyds clear things on odd days and at odd times. They've cleared my pay in the middle of Sunday morning before. I wouldn't be entirely surprised by a payment clearing on a Saturday.

Lloyds clear things using the standard cycle.

The weekend is not a working day and transactions can appear at different times over the weekend depending on when the batches are processed. Saturday, Sunday and Monday are basically all Monday as far as transactions are concerned.

Also does anyone know what 'cleared' means on a bank account? Doesn't it mean its yours?

Cleared to withdraw funds does not mean the transaction is free to draw against. It can still be rejected.

Chaps are processed as cleared funds but because the details were wrong the on Chaps payment Lloyds have no choice to return it. That has happened next working day which was Monday.

As it happens it took 48 hours for that money to go back to my client, who are now trying to send it again with the correct details.

If Lloyds Chaps'd it back to the sending bank they would have got it Monday, which is the correct time. If they used BACS they would have got it back Wednesday which is 72 hours. Neither fits your 48 hours.

Regardless of the details of the first receipt, if Lloyds had said, I'm sorry we sent it back because the transfer was incorrect I would have been fine, I wouldn't have withdrawn cash, and I wouldn't have written cheques. But they said it was cleared. I'm going around in circles. Any advice?

I can see what has happened and I dont think there is much that could have been done to avoid it. It is a very rare sequence of events and no-one is really in the wrong as each individual you spoke to is technically right for the majority of transactions.

The money arrived Friday as cleared funds. The bank returned it next working day (monday) as they should have done. You phoned a call centre on a Saturday who wouldnt know that the chaps was wrong and they correctly said the funds were showing as cleared. They wouldnt know the CHAPS was going back next working day.

If the bank knew the details were wrong on the Friday they could have earmarked your account to prevent you drawing the funds. However, if the incorrect account name didnt show up until an audit check on Monday then they couldnt avoid it.

pani_2

Thanks for those replies. I accept pretty much what you are saying, however I have a concern that a CHAPS payment which is a secure and guarenteed payment can be sent back on a day other than the day it arrived.

I now have a statement showing that it arrived on Friday and then left the account on Monday.

If I were a solicitor selling a house for a client, imagine the problem that would be caused if I received a CHAPS receipt for £200,000 for a house my client was selling, and we complete contracts and that £200,000 goes up the chain to buy another house etc., etc., and then the next day the bank says:

Sorry, but we had to reject the transfer of funds.

Well that is nonsense as that does not happen. Do you think a solicitor would risk that happening?

Do you know how many CHAPS payments happen a day? 130,000 every day - I bet most of those involve a human somewhere rather than a computer to a computer, so mistakes must happen with that number of transactions like the one I encountered. I'll bet that solicitors consider a CHAPS receipt into their bank theirs.

Any solicitors that can confirm this? Can anyone who relies on receipts into their bank like CHAPS comment on what they would do if the following day this was sent back to the sender?

dunstonh

Thanks for those replies. I accept pretty much what you are saying, however I have a concern that a CHAPS payment which is a secure and guarenteed payment can be sent back on a day other than the day it arrived.

The cut off for processing CHAPS payments is earlier in the day than conventional transactions. It could be that they couldnt time it so it went back the same day.

However, I dont think they spotted it that day. If they had, I am sure they would have put a manual earmark on the account to stop you drawing against those funds using electronic methods if they didnt have the time to get it back that day.

Well that is nonsense as that does not happen. Do you think a solicitor would risk that happening?

It does happen. Although you would expect it to have been rejected at that point. Not next day. Unless it was missed at the time and the audit check showed it up.

Do you know how many CHAPS payments happen a day? 130,000 every day - I bet most of those involve a human somewhere rather than a computer to a computer, so mistakes must happen with that number of transactions like the one I encountered.

Apart from the actual transaction it requires two people at either end to transact. One to input and accept and the other to check the information is correct.

I'll bet that solicitors consider a CHAPS receipt into their bank theirs.

When i did CHAPs payments, we used to phone the solicitor up to confirm it had arrived and was accepted or they would phone us.

ladykibby

This exact same thing happened to me today on my house sale with Lloyds TSB, because my address was incorrect...... Well it would be coz I have only just moved !!!!!! What a load of clowns !! Still at a loss to where the money is!!!!
TSB say they have sent it back to Barclays (Solicitors Bankers), Barclays still not got it back, So I have got my house keys back, so money no house duck !!! What an embarrassment for Lloyds TSB !! Solicitors are furious,,,,,

ladykibby

By the way, CHAPS are irrevocable !!!!!! Yeah right not in TSB eyes .............

Extant

ladykibby wrote: »

By the way, CHAPS are irrevocable !!!!!! Yeah right not in TSB eyes .............

Irrevocable by the sender.

As frustrating as it may be, Lloyds are just doing their job in making sure that the payment goes to the correct person.