Whinge about banks

Whinge about banks

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Why does it take 4 working days for a BACS payment into my account to clear? Where is the money during that time? Does it really take that long in this day and age?
Helen Crowley

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By AnonymousUser
21st Sep 2005 16:28

I would love to hear the answer to this ...
The perverse thing is if you have two accounts with different banks. You send an online payment from one account and the money disappears same day only to turn up in the other account 3 days later. As Paul Daniels used to say "Now that's magic"!

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By User deleted
22nd Sep 2005 08:42

Serious regulation needed .....
for the Banks.

One only has to look at
- charging Customers at 'hole in wall' to withdraw their own money
- Credit Card interest rates
- Credit Card charges to retailer etc (2 way)
- selling un-necessary Critical Illness insurance etc with loans
- non disclosure of better saving rates to existing customers

and so on ....

For instance the Banks have almost never been held to account over their actions with Customers. To all intents and purposes they do not have a DUTY OF CARE to their customers. Compare that with all other Professionsls PI insurance requirments!

The various 'watch dogs' seem to be completely toothless and the Banking Code(s) are voluntary - so there is no compulsion for the Banks to adhere if it doesn suit them.

What's needed is a menu system of penalties when Banks are found to be wrong - i.e. with the latest Credit Card charge issue; we are told it has been going on for a number of years. Therefore they should be fined the sum total of their 'gain' plus accured interest over the period PLUS a penalty factor of say between 2-5 times their benefit.

This would concentrate the Banks minds and prevent their 'money laundering' schemes without due consideration for the consquences.

As the Nationwide Ad on the telly says ..... bubbly at the shareholders meeting .... humerous, but a bit to close to the truth

There is no great urgency when the Banks clean up on £millions in limbo each day with the current clearing system

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By adamsgi
21st Sep 2005 17:45

Rip-off banks
The fact that they can do a CHAPS payment (automatically crediting same day) means that it doesn't have to take that long, but of course they can charge you upwards of £35 for that! The best one is cheque clearance. With my bank it takes 4 working days, but with a certain other bank which used to be a building society), it takes seven. Their answer? Because that's how long it took when they were a building society, and so they haven't updated their system. Basically they hold onto the money and use it without having to pay anyone interest.

Ah well - let's hope this review of the banking code goes ahead, and actually makes a difference!

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By AnonymousUser
21st Sep 2005 17:14

Possibly of interest
You may be interested to know that there is a current investigation/project etc. going on aiming to reduce this time for electronic transfers exactly on the basis that you have suggested (i.e. can it possibly take that long in this day and age?)

Can't remember where I read this - probably on Accountingweb somewhere!

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By Neville Ford
22nd Sep 2005 09:02

Technology is not the problem
Historically it took that long as cheques were sent by post from the depositing branch, to the central clearing house, to the issuing branch for clearance. When technology came along and the transfers were effectively same day the banks realised they had a pot of money they could lend out for which they did not have to pay any interest - a nice little earner as they say.

At one time I worked for a large business where we often had large cash balances. We placed this money on the overnight and short term loan market and had software to monitor the rates being offered through the morning and placed it when we thought was the right time, basically the game was over by lunchtime as the bank had the funds they needed by then. We made nearly as much profit from this activity as we did from trading. So it's not surprising they are reluctant to change, as this is exactly what the banks are doing in some form or other with our money.

Technology is not the problem:

I use the Nationwide BS. If I go into the branch and request a transfer between two passbook accounts the money disappears into the ether for 3 days. If I make a cash withdrawal from one account and deposit it into the second account it happens the same day, so this is what I always do. For their internet accounts, if I do a transfer on their internet site it appears to happen immediately.

I recently wanted to send some money to the US. The only way I could do it was by bank transfer - the bank told me that it would cost £25 and take anything from 3 days to 8 days depending on how many banks it had to pass through to get to the receipient's account. I could have flown to Florida, drawn the money out on my cash card and given it to the receipient who could have then paid it into his account - same day transaction.

The point is the technology exists to debit and credit accounts virtually anywhere in the world in realtime. So why doesn't it happen?

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By neileg
22nd Sep 2005 09:03

Change coming?
One Scandinavian government (Sweden I think) has 'leaned' on their banks, and a money transfer now takes just a couple of hours to clear. I remember seeing a documentary on the TV about this, and the implication was that the change would come in the UK, but not immediately (a few more years of ripping customers off!).

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By Neville Ford
22nd Sep 2005 09:22

Toothless watchdogs?
JC I'm not sure that the banks share your view that the Banking Ombudsman is toothless.

A few years ago I had a client come to me, she had lost her husband about 18 month prior. In settling the estate of her late husband the solicitor had written to the bank requesting details of balances and any outstanding loans, the letter was similar in wording to the standard bank audit letter. The solicitor settled the amounts the bank claimed.

The reason she came to me was that she had just noticed that the bank was still taking a monthly DD from the account. It transpired the bank had omitted to include a personal loan in the settlement letter. I wrote to the bank claiming negligence on their part and requesting reimbursement of the interest incurred from the date of settlement of the other liabilities, compensation for distress and my fees. The correspondence quickly moved from branch to regional office. They were very slow in responding and tried all sorts of diversions. In the end I wrote to them stating that as we could not agree the matter was it their view that we were now in deadlock. I received an offer by return of post.

To go to the Banking Ombudsman the bank has to issue a deadlock letter, they appeared very reluctant to go down this route.

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By NeilW
22nd Sep 2005 10:48

Simple
During the three days the money is in the bank's treasury department earning a small fortune on the money markets.

There is no technological reason why banks take three days to clear payments. It is simply a matter of profit for the banks.

If the payment delay was eliminated, and the late payment culture stamped on by firm government action (like getting the Inland Revenue to collect late payment charges and interest on every invoice paid late), then there would be a lot more business in this country and more tax for the Exchequer.

However to get that going we'd need political masters with more calcium and less collagen in their spinal columns.

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By Albasas
21st Sep 2005 20:09

Banks Have To Balance The Books Too
At the end of the day head office looks at the money in money out situation. It then places some on deposit with the Bank of England or even lends out to home owners etc. So it is probably delayed by the logistics of the banking business as they seek to balance the books. They cant pay out without internal controls being in place. You wouldn't expect them to either I guess.

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By geoffwolf
21st Sep 2005 21:48

proliferate bank accounts
The easiest way to combat this problem is to set up accounts with all the main clearing banks. You then work on sort codes that match.
If enough customers adopt this method the banks will soon realise that they need to clean up their act.

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By User deleted
22nd Sep 2005 13:53

Free banking has to be paid for !
Many of us are accustomed to benefitting from "free" banking.

This freebie has to be paid for some how !

I suppose the Banks earning money on cash in transit "through the system" is one way of
subsidising the free banking.

Now, I recall that last year a TV programme (maybe Working Lunch) pointed out that the 3-day delay doesn't happen in mainland Europe.

I think the UK Banks' response was something to do with clearing bank systems/ networks/ computers not being ready in the UK.

If mainland Europe does NOT have the UK's
3 day delay, do they also not have free banking ?


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By ACDWebb
21st Sep 2005 17:48

Annoying isn't it!!
And that's the cleaned up version.

I too had heard that there was a project in hand to reduce the time taken.

Interestingly when I arranged a couple of BACS payments to HMRC - to test the way forwards from 1 Jan 2006 when local offices stop taking tax payments and we are stuck with post, bank, post office or online - they showed up fine in the client online SA statement 3 working days later, but showing the date we sent the payment not the date of receipt in the HMRC account as the paid date. It remains to be seen if it goes as smoothly at the end of January, but we can hope

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By AnonymousUser
22nd Sep 2005 11:08

Profits before customers
I asked this question to a friend who works for State Street bank a while back and he confirmed that the "high street" banks do this all the time (i.e. invest the money that has disappeared into the ether) in stocks/currency or whatever makes them profit on your money. Annoying isn't it? However, if I move money from First Direct to HSBC and vice versa, this does appear in the other account immediately (as First Direct is a subsidiary of HSBC), so at least it doesn't happen in all cases.

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By Richard Willis
26th Sep 2005 16:53

'You know when you were abroad.........
and you had a meal; did you leave a tip?!!!!!!!!!!!

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By Nigel Hughes
27th Sep 2005 14:13

The reasons why
I think there are two possible reasons why it takes so long.

1. There is a big knot in the cable between say Natwest and Barclays, and the poor little electrons have to form an orderly queue to get through.

2. There is a large cavernous hall somewhere under London (probably somewhere between Gringotts and the Ministry of Magic) where there are a load of printers on one wall, an array of scanners on the other wall and an army of men wearing frock coats and top hats and carrying battered leather briefcases, who scoop up the output from the printers and feed it page by page into the scanners.

I can't think of any other rational reason why it takes so long - but presumanly someone somewhere had to write the code for the programme which ensures that it does - and that's what I find really surreal

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By AnonymousUser
28th Sep 2005 11:29

Free Banking & ranting
If I stay in credit I get a piddling amount of interest, while they invest my money.
If I go overdrawn I get charged a ridiculous rate. If it's unauthorised the rate is extortionate plus there are the charges at c£30 a pop. A charge incurred because they can't clear a cheque in 4 days! Oh and now another charge incurred by the credit card, theirs of course, for late payment!!
I can't get my money out with out ordering it days in advance if it's over a certain amount.
My personal banker vanished with no replacement.
My branch was closed and the nearest one is now 13 miles away and they wonder why I have trouble paying in a cheque?
Call centres, being on hold and so on.....
Banks - Love 'Em!!!!!

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By NeilW
22nd Sep 2005 14:55

Delay
Many of us are accustomed to benefitting from "free" banking.
This freebie has to be paid for some how !

It's already paid for by the turn on lending to savings.

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