Questions of Cash: Why am I being overcharged to transfer money?


Q. I am very unhappy at the way the Bank of Scotland has charged me for transferring payments between my accounts. After regularly using Bankers Automated Clearing Systems (Bacs) to transfer sums of about £30,000, Bank of Scotland has now set a £5,000 limit on Bacs transfers and anything above that must go by Clearing House Automated Payment System (Chaps) at £18 per transaction. I accepted that larger payments should be subject to a verification check, but this is unreasonable.


JH, by e-mail.

Q. I am very unhappy at the way the Bank of Scotland has charged me for transferring payments between my accounts. After regularly using Bankers Automated Clearing Systems (Bacs) to transfer sums of about £30,000, Bank of Scotland has now set a £5,000 limit on Bacs transfers and anything above that must go by Clearing House Automated Payment System (Chaps) at £18 per transaction. I accepted that larger payments should be subject to a verification check, but this is unreasonable.
JH, by e-mail.

A. Bacs is the standard automated system of electronic payments, which is normally free of charge. Chaps is a guaranteed same-day electronic payment system, historically used only for high-value transactions but increasingly for lower-value payments. It typically costs £20 to £30.

The Association for Payment Clearing Services (Apacs) says it had not previously heard of a bank requiring a customer to use Chaps rather than Bacs, and this seems particularly strange when you are making transfers between your own accounts. Apacs' spokeswoman, Sandra Quinn, says: "This may be a specific requirement from a particular bank to a particular customer. There are payments going through Bacs of over a million pounds."

Bank of Scotland says that the Bacs service you used has a £5,000 limit to prevent fraud and money-laundering. It is in the process of upgrading its systems to improve security and until this is completed it will continue to process your transactions by Chaps, without charging you.

Q. I received a letter in February from Halifax responding to my complaint last year of endowment mis-selling, in which it confirmed that it could not "find any documentary evidence to indicate that our interviewer explained all the risks associated with using an endowment policy" and that a calculation would be made to determine what losses we might have incurred. I have heard nothing since. After reading your column, I telephoned Halifax again but was told they had not reached a conclusion.
PB, Worthing.

A. Halifax has now sent you a cheque for £3,300, representing your financial loss from taking out an endowment.

Q. I complained to Halifax in February last year over the mis-selling of an endowment. After it failed to respond effectively, I complained in June last year to the Financial Ombudsman Service. FOS responded in April this year, saying it had upheld my complaint. But I am still awaiting payment from Halifax.
PJ, Clitheroe.

A. Halifax says it is waiting for financial information from Scottish Widows to make a firm offer of compensation to you, which should be with you next week. It is clear from the problems that you and other readers are suffering that Halifax has not caught up with its backlog of endowment complaints.

Q. My wife and I have invested in Prudential's Additional Voluntary Contributions (AVCs) to teachers' and lecturers' pensions schemes. The return has been poorer than if we had put the money in a savings account. We are both 58 and intend to work for several more years. Should we cease making AVCs? Can we take action against our union for recommending them? Or should we pursue Prudential?
AC, Wolverhampton.

A.Carl Melvin, a specialist pensions adviser at Pension Transfer Solutions, says poor performance is not in itself grounds for complaint. To obtain compensation you need to demonstrate that the plan was mis-sold: you should have been advised of the risk of poor returns and given comparisons with other options. Mr Melvin suggests that, if appropriate, you lodge a complaint with Prudential or the IFA which sold you the policy. If the complaint is unsuccessful you can appeal to the Ombudsman. You should contact a pensions specialist to determine whether you should continue paying the AVCs.

Q. In Ireland recently I found that credit and debit card payments were automatically reported in sterling at a poor rate of exchange. Surely any transaction must first be offered in the currency of the country in which the service takes place?
RP, York.

A. Many traders in the Irish Republic accept payments in sterling, either by cash or cards. Where traders accept either euros or sterling the law requires them to state clearly and prominently what rate of exchange they are using. If a business is accepting payment by credit or debit card it can only take payment in sterling if it has offered the customer the option of paying in euros. Any trader failing to comply with this can be reported to Ireland's Office of the Director of Consumer Affairs.

* If you have questions, write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk. We can reply only to letters published. Please send copies, not originals.

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