Questions Of Cash: 'Lloyds blunder left my account £11m in the red'

Q. Lloyds withdrew £11,520,000 from my savings account in January to place on a three-day fixed-term money market deposit without my knowledge or consent. According to a note from Lloyds, the transaction was as the result of a telephone instruction – which was not from me. My entire savings were wiped out and my account balance turned into a deficit of £11,500,000. My savings account has no overdraft facility. I only found out about the transaction at the end of January when a copy of the transaction note from the bank's trading and sales team came through the post. As it was a Saturday, there was no one to answer my calls, but I eventually got through to the bank's helpline, which promised the matter would be resolved within three working days. The following Monday, £11,520,946.85 was deposited into my account – and then the same sum was withdrawn and £11,520,000 deposited. I phoned my bank relationship manager and explained the situation. I was promised no penalty or interest charges would be made. The following week an interest charge of £24,918.64 was withdrawn from my account for an "unauthorised withdrawal". After several emails and phone calls, the amount charged was refunded to my account. I later received a letter saying that, as all monies had been recovered, the bank would treat the matter as closed unless I replied by 21 April. It ignored my request for an explanation and assurances it would not recur and that my credit rating would not be affected. In reply, I demanded a reasonable settlement for the stress, anxiety, time spent and inconvenience caused. Lloyds' recovery team offered a goodwill payment of £250. CH, Hampshire.

A. You contacted us in March and we have been in regular communication with Lloyds. The bank says it is "extremely sorry for the mistakes that we made". Lloyds adds the problem was not one of fraud – as seemed likely, given the explanation that the money was withdrawn on a telephone instruction – but one of confusing your account with that of another customer. You might not regard this as any comfort! Lloyds' spokesman explains: "Due to a one-off error, we accidentally debited this customer's account. We also made a subsequent error in charging interest to him, for the unauthorised overdraft, which resulted from the original debit. Clearly these mistakes should not have happened." Quite! As well as a full, Lloyds has agreed to pay you £1,250. You have generously decided to donate part of this to sponsor a golf tournament to support the Neurofibromatosis Association.

Q. In December last year, we bought a floor lamp from a shop in Surrey for £700. We were told delivery was included in the price, which was also stated on the receipt. When the item was delivered from France to the shop in January, we were told we were "too remote" in Suffolk for a delivery, so we could either cancel the order or arrange delivery ourselves. For this the shop would refund us £70. The refund was made in January, although the cost of delivery was only £21.99. At no stage were we told to take out insurance for the delivery, which is what the shop now says we should have done. On arrival, the lamp was broken. The shop had already left a message to check the goods arrived safely, admitting they had not checked the condition before forwarding them. We phoned the shop, which offered to do a straight swap for undamaged goods. Nothing happened and, after a few weeks, we were told we could either keep the broken lamp or get a refund, as the shop would not do an exchange after all. We accepted the refund and returned the broken item at a cost of £41.99. We are still waiting for our money. LK, Suffolk.

A. You originally contacted us in March. The trader maintained you were responsible for the breakage – assuming it had happened after the goods had left the shop, not in transit from France. As it refused to meet the costs of the broken goods, we requested that your credit card issuer – the Co-operative Bank – make a chargeback for the transaction. It did this and your account was credited. But the trader then challenged this and your account was again debited. We pursued the matter with the Co-operative Bank, which applied to Visa for approval of the chargeback. This went to a "pre-arbitration" procedure – in which the trader's Visa provider liaises with the trader before going to formal dispute. At this point, the trader appears to have accepted that your claim was valid. Your account has therefore been credited with the £700 value of the original transaction.

Q. I am the executor of my brother's estate. He was a long-standing member of the Portman Building Society and died six weeks before the merger with the Nationwide. My sister-in-law was refused the bonus payment because my brother died prior to the completion. Building societies are permitted to make bonus payments for mergers even when the exact terms for obtaining the merger payment have not been met. But Nationwide has refused to make the payment, saying it is "not possible". Surely the society can make an exception as a gesture of goodwill? DL, London.

A. The Nationwide says it would be unfair on its other members if it made such an exceptional payment. A spokesman for the society says: "The commercial decision that Portman made in relation to the payment of bonuses was set out in the merger booklet, which eligible voters voted and agreed on. This essentially was that to qualify for a bonus, members had to qualify on two dates – as at the close of business on 11 September 2006, just as the merger was announced; and as at close of business on 24 August 2007, just before the merger effective date. If a member died between these dates, then their entitlement died with them. This criteria applies to all similar cases and, therefore, we continue to refute the request for a bonus to be paid. Unfortunately, we cannot make individual exceptions as this would be unfair on other members."

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

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