Questions of Cash: 'Foreign currency cheques are a nightmare'


Q. I recently inherited some money in France. On 31 March, I paid in a cheque of €81,000 from my French bank account into my HSBC branch, to deposit in my sterling account. HSBC then wrote indicating that this would take six to eight weeks, attaching the terms and conditions for the transaction, but not explaining why there is such a long delay.
I have called HSBC to complain, but got nowhere. MH, Bromley.

A. By coincidence, the transaction was credited to your account on the day we raised your problem with HSBC, four weeks after you presented the cheque. A spokesman for HSBC says: "Foreign currency cheques are a bit of a nightmare: we don't have a great deal of control over how long they take to clear. International banks will only transfer the money once they have physically seen the cheque, so it needs to go back to the foreign bank – and in some cases the specific branch – the cheque is drawn from for authentication. This means we are beholden to the issuing bank in being speedy in clearing the cheque.

"We aim to have sent the cheque overseas within two working days. International cheques are not bound by sterling cheque 2-4-6 timescales [two, four and six days to clear various stages in the cheque processing system]. [International cheques] clear in a UK account only once the cheque has been authenticated by the issuing bank and the funds transferred.

"The good news is that France is geographically close and their banks are certainly not the slowest in clearing cheques internationally, so although we state it should be cleared in six to eight weeks, in the majority of cases it is considerably quicker.

"It might be frustrating advice after the event, but if someone is simply writing a cheque to themselves from a European bank account, we would highly recommend electronically transferring the money instead. SEPA [Single European Payments Area] payments normally take just two days, and from 1 January next year all EEA electronic payments must clear the following day. I appreciate the customer's frustration, but hope this also shows it is not an issue unique to HSBC."

By chance, the delay has worked in your favour, earning you, by our calculation, around €2,000 because the euro gained in value against sterling during the delay – but it could have gone the other way, of course. The cost of the SEPA transaction would have been determined by your French bank, but would probably have cost significantly less than €50.

We wondered whether any delays had been caused by conducting money laundering checks – a matter of widespread concern. But HSBC tells us that in your case no money laundering checks were required.

Q. My wife and I were due to travel from Edinburgh to Heathrow in early December. The night before, we received a message from BA saying that the flight was cancelled because of bad weather and to check the website for further information. We did so and found that we could rebook flights free of charge. But the website would not let us rebook and the phone line was constantly engaged. So our travel agency rebooked us flights from Glasgow. The agency said I had to pay for the new flights and request a refund of £567.43 for these from BA. But the refund from BA was for the value of the original flights – £167.26. We wrote to BA requesting the balance, but it says the agency should not have obtained the tickets on the basis that they did. Eventually BA contacted us requesting our bank account details to pay us the balance, but nothing has arrived. BM, Fife.

A. BA paid the balance of £400.17 into your account shortly after we contacted them. As we have found with previous inquiries relating to BA refund requests, it can take a while for refunds to be credited to customers' accounts.

Q. I took out a loan with Asda in October 2009 for a car purchase, with repayment by standing order. In February 2010 my loan was transferred to Santander. In May last year, I received a letter from Santander stating that I had missed two payments. I produced proof of the payments, produced bank statements and had my bank produce a track of the transactions. In the mean time, Santander registered a defaulted payment on my credit record.

In July last year, I received a letter of apology from Santander, accepting that I had not missed any payments. Then I received further letters stating I had missed payments in September, October, two in November and then again in February. On each occasion I had to repeat the previous process. Eventually I received another apology, explaining there had been a "systems error". Now I find that my remortgage application has been rejected because of a failed credit check.My credit history has always been good.EK, Louth.

A. A Santander spokeswoman says: "We are sorry for the delay in resolving [the reader's] complaint and we're sorry she is unhappy with the service provided, particularly with regards to her loan account. We understand she has been making monthly payments to her Santander loan, from her HSBC account. However, due to a Santander technical error, payments made prior to November 2010 were not applied to the loan account.

We can confirm the payments have been received and we have ensured there are no adverse comments on [the reader's] credit file as a result of this error. To acknowledge the inconvenience [the reader] has experienced, we have arranged for a goodwill payment of £300 to be sent. We hope she will be able to accept this in full and final settlement of her complaint."

Despite this, you are concerned that your credit record may have been damaged, with the reason for the rejection of your remortgage application possibly not properly recorded. At our suggestion, you have contacted the three credit reference agencies – Experian, Equifax and Callcredit Check – to request that each logs your explanation of your recent problems. This should ensure that your credit status is fully repaired.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@ independent.co.uk.

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