Appalling cheque clearing...

Raven · #1 01-01-2004, 16:44

What can I do if i am not satisfied with the amount of time it takes for my bank to clear a cheque? The bank in question is Lloyds TSB, and for a big clearing bank the amount of time they take to clear a cheque into a student account is totally unacceptable. I paid in a large-ish cheque on monday of this week, and was told yesterday by someone in my local branch that this money will not be ready until Wednesday the 7th Jan. Now, bearing in mind that this cheque was from another Lloyds TSB account held at the very branch I was paying the cheque in at! 6 working days (not including the monday, and of course today and the weekend) is simply not good enough!

Raven · #2 01-01-2004, 16:56

Not only that, but the account guide under "How a cheque is cleared" states:

Quote:

It means that you'll have to wait about three working days before taking out this money (this doesn't include the day you pay it in)

**Henry** · #3 01-01-2004, 17:05

I should complain to the manager of the branch.

What you can do is not use cheques ! If you had used an electronic payment it would have been quicker.

**Zoe** · #4 01-01-2004, 17:07

That is really poor service. Have you actually complained to anyone in the branch?

What do they think the problem is? They will presumably bleat about the Bank Holiday today, but that is only one day.

Cause hell and come back to us and perhaps CQ can take it up with Lloyds HO if you get no satisfaction.

Why do we NEVER hear anything good about Lloyds?

Raven · #5 01-01-2004, 17:35

Oh, it gets better Zoe...

Well, first of all I am going to wait to see if it becomes available on Monday - I suppose its possible the branch could be wrong. I have paid in cheques on a monday before, and they have been available on friday of the same week (cheques from different banks this is). The interesting thing is, I am almost 100% sure that when a Lloyds TSB customer pays in a cheque from another Lloyds TSB account, the cheque gets processed that evening and money gets taken from the paying account by the next morning... so either way the bank holds back paying out. Either the fact I have a student account has something to do with it... but for a cheque from the same bank this is still taking a very very long time... Surely they know if they are going to pay the cheque or not!

I did not complain yesterday, because I was in there... yes, you guessed it with another problem - this time trying to figure out why previously cleared funds in my account (which had been in there for weeks) were no longer available... and why my "available balance" according to internet banking and the automated phone service were now zero - and had been so for the previous two days.

Now, I am not totally stupid, so I did an instant transfer of £1 using the internet banking service from my online savings account to my student account - and of course account balance and statement update but available balanace accoring to internet banking and phone banking remained at zero. The lady in the branch then said the available balance wasn't zero and that nothing was wrong, and after trying the cashpoint that too came back with the right balance - and since that both ib and phone banking appear to now be right. So as you can see, I am slightly reluctant to do anything at the moment... and do get the feeling I am being messed about with...

Don't get me wrong, the customer service in my local branch is actually very good, often excellent... but I am beginning to wonder if i can actually trust Lloyds...

MarkyMarkD · #6 01-01-2004, 18:12

It does sound like they are messing you about, Raven.

The available balance thing sounds like a temporary problem with their systems.

And the cheque clearance time thing is ridiculous - even if it was a cheque from another bank, it should have cleared within 3 working days, and as it was an account at the same branch of Lloyds it really should clear overnight if they still do that.

I'm not sure that all the "big 4" still clear cheques in the branch, though, so the 3 day thing could apply equally to "own branch" as to "foreign" cheques. Many of the newer banks never cleared cheques locally and accounts are not held at specific branches, so the distinction for them doesn't apply.

But, more to the point, as Henry says, get the money transferred electronically which should take place same day at the same branch.

Raven · #7 02-01-2004, 00:17

If you pay in a cheque from the same bank as the account you are paying it into, does the money even enter the normal clearing system?

There seem to be a lot of articles from financial related sites saying banks sit on the money for days, after putting it into money market accounts so they can make extra profit

**Batsman** · #8 02-01-2004, 00:24

Well, yes they do. And the turn they make on it possibly means that they don't have to charge you to run your account.

See this thread

But one might expect the clearing time to be reasonable nevertheless.

MarkyMarkD · #9 02-01-2004, 22:36

I was going to cross-refer to that other thread, too.

There is NOT any creaming off by the banks on normal cheque clearing.

The money isn't available to you for a few working days, but nor is it deducted from the payer's bank account.

Nor is there any creaming off on debit card or ATM transactions, or direct debit payments, all of which are debited and credited on the same day (normally).

The only area where there is scope for the banks to make some turn, is on BACS transfers, because the money is deducted from the payer's account on day 1, paid over to the receiver's bank on day 2, and credited to the receiver's account on day 3. So both banks make 1 day's interest in that case.

As I said in the other thread, there are better things to get excited about than 1 day's interest.

This is different to the apparently hopeless timescales Raven is referring to from Lloyds, but the clearing cycle isn't generally designed to make money for the banks but just due to the processed involved.

**Zoe** · #10 02-01-2004, 22:43

So if it is not making money - which I thought was fair enough - why are they so slooooooow?

In this electronic age it does not seem to make sense

MarkyMarkD · #11 03-01-2004, 00:19

I really don't think it IS that slow - 2 working days, to transfer money to any account anywhere in the country.

It might seem easy, but there are MILLIONS of transactions per day and each bank has to submit its file of transactions to the clearing system, the total amounts have to be reconciled and settled, and then each bank has to process all the individual credits to its own customers' accounts.

The fact this all happens in the space of 2 working days seems pretty good to me!

Raven · #12 03-01-2004, 00:39

Well, apparently in Australia cheques clear within hours though the electronic system there... and the technology exists for very fast cheque clearing, it would just mean banks over here investing millions to have it - and given the fact it would mean banks actually having to spend money *shock horror* and make no profit in return, we have to put up with often pathetic cheque clearing times... But I do agree 3 working days is fine.

Anyway, I will definitely be having a good moan to Lloyds before wednesday. At this rate, it would have cleared quicker if i had paid it into a building society savings account

If it comes to it, I will find out the exact date it left the account of the person who gave me the cheque, and if I then find out the number of days between it leaving and arriving is more than three working days I am going to see if I can get money back due to lost interest - because the student account attracts a wonderful in-credit rate of about 0% i think - so it must really cost Lloyds a lot to run these accounts

MarkyMarkD · #13 03-01-2004, 00:43

Quote:

Originally posted by Raven
Well, apparently in Australia cheques clear within hours though the electronic system there... and the technology exists for very fast cheque clearing, it would just mean banks over here investing millions to have it - and given the fact it would mean banks actually having to spend money *shock horror* and make no profit in return, we have to put up with often pathetic cheque clearing times... But I do agree 3 working days is fine.

And why SHOULD banks invest money to make an improvement which very few customers actually need, and only a small number even superficially claim to want? If customers want faster clearing, they would have to pay for it. And I, for one, don't want to.

Quote:

Originally posted by Raven
... because the student account attracts a wonderful in-credit rate of about 0% i think - so it must really cost Lloyds a lot to run these accounts

Current account running costs have very little to do with interest paid on the balance, and far more to do with the cost of processing cheques, providing branches and an ATM network, etc. etc. etc. Admittedly, they are saving some money paying 0% on current account balances - but then again, the average student credit balance is not very large

Raven · #14 03-01-2004, 00:50

Which is fine, they probably use the money saved to provide the interest-free overdraft... but I dont see why I should have to wait extra-long to get access to my own money... especially when the payment is coming from one of their accounts!

MarkyMarkD · #15 03-01-2004, 00:54

Don't worry, Raven, we are violently in agreement that Lloyds have taken too long to give you access to your funds.