Why did Lloyds Bank stop my cheque after 60 years of business? TONY HETHERINGTON investigates
Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers’ corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
Mrs J.D. writes: I am a partner in my family’s farming business. We received a cheque for £23,256 for shares in Dairy Crest, which had been sold. The cheque was made out to my husband. But after it was deposited in the business account, Lloyds Bank rejected it, even though for 60 years the bank has accepted cheques made out to family members without a problem. The bank then destroyed the cheque instead of returning it to us.
Out of pocket: The £23,256 proceeds from the sale of shares in Dairy Crest were initially rejected by Lloyds Bank
The bank’s decision to reject the cheque was annoying. Its decision not to return the cheque was incomprehensible. But what happened next was even worse.
As all this was going on, your husband sadly died. And the firm that issued the cheque refused to provide a new one until you obtained a Grant of Probate covering his estate. Given the complexities of valuing an interest in a family-run farm, you reckon this is likely to take about a year.
Meanwhile, your farm is being run by two remaining partners and the business is out of pocket to the tune of more than £23,000.
But here is a bit of detail that most bank customers won’t know. Your cheque went through a recently introduced process known as the ‘Image Clearing System’.
This takes an electronic copy of the paper cheque and three days later the cheque itself is destroyed. The need to store paper cheques for only three days instead of far longer is a big step forward for the banking industry.
So, the basic mistake was not so much the destruction of the cheque, but the bank’s refusal to accept it in the first place. Your farm is run as a partnership and it is not at all unusual for business cheques to arrive showing the name of just one partner, particularly if the customer has only been dealing with that one person.
Your family has been banking in this way for many years and Lloyds has been happy to accept cheques into the partnership account even if they show only one partner’s name.
I asked officials at Lloyds to look into what had gone wrong with this one cheque and what could be done to put things right. An obvious answer that sprang to mind would have been for the bank to lend your farm the missing £23,256 free of interest until the Grant of Probate was obtained. Happily, Lloyds went much further.
It began by making an immediate payment of £500 to make up for the distress and inconvenience, and then it added a further £517 to cover lost interest.
But the icing on the cake was that Lloyds persuaded Equiniti, which was involved in organising the Dairy Crest deal, to allow its account to be debited with the £23,256 without there having to be a new cheque. And that £23,256 has now popped up in the account of your family’s farm.
A spokesman for the bank told me: ‘Unfortunately, human error led to the cheque being rejected. We are extremely sorry for the distress and inconvenience this has caused. The cheque has now been paid to Mrs D, as well as an additional payment in recognition of her experience.’
My flat’s warranty is missing
B.G. writes: I bought an apartment in a block developed by the P.J. Livesey Group. Insurance certificates covering the building were issued by LABC Warranty, but in error, certificates for two apartments, including mine, were not sent. Six years on, we have found a building defect and need to make a claim. I contacted LABC and it confirmed it would send a certificate, but then it found there was a claim going through so now it will not issue it.
Tony took this up with the insurer and it quickly agreed to send our reader the necessary certificate
The Local Authority Building Control warranty scheme effectively provides insurance in case anything goes wrong with a development. The insurer issued a cover note to the developers in 2012 and when you called you were told the final certificate was sent in 2013, though you did not receive it. LABC Warranty assured you that it would issue a fresh certificate, probably by the end of that day.
You have told me that you believe your mistake was in mentioning that you needed the certificate because there could be a claim. You feel this made the insurer less keen to help you. But your need to make a claim should have no effect on the issuing of a certificate now.
I took this up with the insurer and it quickly agreed to send you the necessary certificate so work could take place without any financial risk to you. Good.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email email@example.com.
Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.
Car hire firm charged £244 for no reason
Mrs J.C. writes: We booked a holiday through Tui to Gran Canaria and received an email from Tui offering car hire. When we returned the car, the hire company representative was in an animated conversation about lost keys. He refused to check our car so we took pictures, showing it was in the same condition as when we collected it. Back home, we found our credit card had been charged £244 for something we know nothing about, and now Tui denies we even booked through it.
When you made the booking, you received an email saying ‘Thank you for choosing Tui for car rental.’ But when you queried the £244 charge, Tui told you: ‘As you have booked with Cartrawler directly, we are unable to assist.’
One of these statements had to be wrong and you supplied me with pictures of the car and even the fuel gauge, leaving me puzzled as to what justified the extra £244 bill.
Tui tells me that under its terms, although a customer might make a booking through Tui, it regards the contract as being with the local car hire firm. But Tui added: ‘We are aware that Mrs C has had a frustrating experience and therefore, as a gesture of goodwill, we have given a refund.’