Bounced into a nightmare
Drawing a considerable sum against a bad cheque - an HSBC customer recounts her misery to Miles Brignall
Saturday February 5, 2005 The Guardian
Most people would expect a bank that advised a customer it was safe to withdraw a sum against a cheque which later bounced would assume financial responsibility for the error - but they'd be wrong.
As Jobs & Money can reveal this week, some banks will pursue their customers through the courts and cripple them financially as a result of errors made during the clearing process. An example of how the cheque clearing process can go terribly wrong for bank customers is graphically illustrated by the case of Marilyn Sulley.
The Epsom-based single mother of three now faces having to sell her house to repay a debt of £17,000 after her bank HSBC allowed her to draw against a cheque which then bounced.
Ms Sulley's battle with the bank started in July 2002 when she was approached by one of her then boyfriend's relatives, who said she was going through a difficult divorce. She asked whether Ms Sulley would mind if her boyfriend paid a cheque into her account and to pass on the cash when the cheque cleared.
Although initially sceptical, the secretary, who works at Epsom Business Centre, agreed to do it after being told that the money would be used to help a single mother.
"Looking back on it, I realise that I was the subject of a sting. I was concerned about helping this person, but thought that as long as I waited for the cheque to clear, there was no risk to myself. How wrong I was," she says.
On Tuesday (July 2), her boyfriends' relative paid a cheque for £12,886 in to an HSBC branch in Walsall in the West Midlands. They had asked to be given £10,000 in cash and a cheque for the rest once the cheque had cleared.
The next day she contacted her branch in Epsom to say that she would be withdrawing the cash once the cheque had cleared, and asked when that would be. She was advised that would happen on Thursday or Friday.
On the Friday morning she telephoned to check the cheque had cleared and when she was told that it had, she arranged to go in later that morning.
"I knew all the cashiers at the branch because I do the business's banking there. I asked them to double check it had cleared and when told again that it had, I took out £10,000 and handed it over to the relative.
"You have no idea how I felt when I got a letter the following morning to say the cheque had bounced - I felt sick and went into a state of shock".
"All my attempts to get the money back failed. I know I was stupid, and fell for a sob story, but what I wasn't prepared for was the attitude of HSBC, who have treated me as though I stole the money," she says.
Her bank account was quickly frozen and all lines of credit were withdrawn. The bank initially tried to get her to take out a loan to repay the money, and when she refused, the staff said they would sue to get it back
For two years HSBC repeatedly threatened to take her to court to recover the money but kept halting proceedings prior to the court date.
Finally in October 2004 - two years after the event - she was summoned to a hearing in Guildford.
"I left early in the morning to be there for 10am but when I got there I was told the case had been moved to Berkshire, and to get a cab over there. When I explained that I had no money I was told to get £50 out at the cash machine - but, of course, my account was frozen."
She was offered the chance of the HSBC legal team, and the court staff coming back to Guildford but warned it would add considerably to her costs if she lost. Despite asking for it to be adjourned, the case was heard in her absence in Reading.
The court found in HSBC's favour and a charge was put on her house. By this stage that debt with legal costs had risen to £15,700. She appealed in December, but says without legal representation, stood little chance against HSBC's barrister.
"I now accept that I should have been represented in court. Legal aid is not offered in such cases and I just didn't have the money as I already had this huge debt hanging over me. I paid a solicitor £250 to help to prepare my written statements but I couldn't afford any more.
"When I appealed in December, I sat sobbing throughout the proceedings. The judge expressed some sympathy for my plight but said the law on the subject was clear," she says.
The case appears to have rested on whether Ms Sulley was told when she took the money out that the cheque had cleared for "interest purposes and withdrawal but could still be returned unpaid". HSBC told the court this was what happened.
However, Ms Sulley is absolutely adamant that she was not given this warning at any of the three occasions when she asked whether the cheque had cleared.
"If they had told me that there was any chance that the cheque could be returned unpaid I would not have taken out the money, it's as simple as that. I had nothing to gain by doing so - I was simply trying to do this woman who I had only met three times a favour."
In a statement HSBC said: "We treat cases like this on their individual merits. In a case where we feel the customer was a genuine victim of fraud, not negligent and where we feel our staff have given misleading information upon which the customer acted we will generally (and have) taken on the loss.
"In this case, though, we (and the court, on two occasions) are confident that our staff gave the correct information. In addition, we have made efforts to help Ms Sulley repay the amount owed in a way that is most manageable for her - and she has rejected all these attempts."
A spokeswoman also said the bank was surprised that Ms Sulley had not reported the incident to the police.
She says she has. "I did talk to some policeman friends about it informally but was told that without a forwarding address, there wasn't a lot that they could do.
"I cannot begin to describe how awful this has been. I have been bullied by the bank staff, called a liar, and I've even been on antidepressants.
"It now it looks as though I am going to have to sell my house. The debt now stands at £17,069 and is growing every day."