How new rules on cheque clearing can bounce you into the red

How new rules on cheque clearing can bounce you into the red

I paid a £3,000 cheque into my Alliance & Leicester current account on 30 November. On the same day, I wrote a cheque for £4,460 to pay my Nationwide credit card bill. There was enough money in the A&L account to cover the difference. I thought each cheque would take the same time to process, so there would be no problem, but the cheque to Nationwide bounced. A&L charged me £25 and Nationwide £141 in interest and penalties. PB, Maidstone, Kent

Margaret: Cheque-clearing times are complicated. A&L made two attempts to get it right, after trying to persuade me that its cheque-clearing process included Saturdays, unlike any other bank. The traditional three-day clearing cycle applies to people writing cheques, not those receiving them, and the £4,460 you sent to Nationwide was on a faster track than the £3,000 you paid into your A&L account.

You wrote out the £4,460 cheque on a Friday and it started clearing that day, Day One. It was presented for payment on the following Tuesday, Day Three. But the £3,000 hadn't yet arrived because cheques you pay in are subject to what banks call the '2-4-6 rules'. These set a guaranteed maximum number of days until you can have access to your money. Two days after paying in the cheque, you start to receive interest; four days after, you can withdraw the funds, but the cheque may still bounce; six days after, you can.....continued below

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withdraw the funds and be sure the cheque won't bounce.

The 2-4-6 process starts when a bank receives a cheque at its clearing centre - Day Zero. You paid in your £3,000 on Friday 30 November and processing began the following Monday, Day Zero - because A&L doesn't work on Saturdays. The money was not available until Day Four, which was the Friday, three days after the other cheque bounced.

Money should be available in the morning of Day Four, but A&L advises customers to wait until the end of that day. This is illogical because there is no certainty until Day Six. A&L agreed to refund its £25 fee but Nationwide, quite reasonably, says it cannot refund charges it correctly imposed. For more information on 2-4-6, see chequeandcredit.co.uk or phone 020 7711 6259.

Bank's advice to go online cost me over £800

When I opened a business account with Royal Bank of Scotland in February 2005, I was told I had to go into branches to transfer money between my business and personal accounts, which was inconvenient. An employee suggested that I try the online banking service, a paid-for account that enables small businesses to be managed online (they can make international payments, set up group payrolls and allow other partners to handle the account).

I had difficulty loading the software on to my computer and called the helpline. The operator pointed out that I didn't need this service and could easily transfer money between accounts with more basic internet banking, which has no fee. I have used basic internet banking ever since. But RBS continued to charge me £40 a month for online banking. It stopped when I raised the issue, but I had already paid over £800. I have repeatedly written to and visited my branch, but everyone says they have no authority to refund the charges. MG, London