Excessive charge for bounced cheque

I wrote a cheque for one hundred tousand euro, unfortunately, forgot to transfer the funds from my savings account to my cheque book account.
When I thought of it I checked my account online and saw that the cheque had just come out that day earlier and my account was overdrawn about 94,000 euro.
I carried out the interaccount transfer online straight away and my account returned to credit straight away.
Within a short time the cheque was returned unpaid and I had to sendnit off again.
I was charged 12.90 for the returned check and thought that was the end of it.

A week ago I noticed that the bank has debited my account 361.09 as int. I checked my email and an email statement from the bank said check account for charges, no amount stated and no breakdown.

I contacted the bank and they said they presume it has to do with the bounced check but would look in to it and get back to me. I haven't heard anything since.
The bank is Ulsterbank and I usually qualify for freebank.

Can anyone please let me know if this is a reasonable charge.

Thanking you all.

Hi priscilla

If they bounced the cheque, then you were not overdrawn and you should not have been charged interest.

Even if they are charging you interest
€100,000
@10%
= €10,000 per year
= €27 per day.

I suspect that what is happening here is that you are lodging third party cheques to the account and then drawing money out. You are overdrawn on cleared funds, but this does not appear on your statement.

But in any event, you will have to ask them to show you how the interest is calculated.

brendan

Thanks Brendan for your reply but no I am not lodging third party checks.
I was attempting to transfer the money from Ulsterbank to another bank and had tried to carryout an electronic transfer but Ulsterbank will only allow small amounts to be transfered each day so I thought it would be easier to write a check so the money was transfered in one go rather than me having to keep an eye on it.

While it iniatially showed up that I was overdrawn, the account corrected itself in a very short time and when I look back at the accounts online it dosen't appear that I was overdrawn at all and as the check wasn't paid out I don't feel the extra charges are warranted.

Is there anyway I can get the bank to credit my account?, I feel they should at least have sent me a statement with the breakdown of charges on it.

The UlsterBank position on interest and charges on unauthorised overdrafts is clearly stated on page 8 here. In addition to the interest, there is a surcharge at "9% (variable) each year". So if we assume an overdraft rate of 10% plus a surcharge at 9%, that gives an interest charge of about €50/day.

Could the interest charge be related to other transactions on the account? Are you in the habit of lodging just in time to meet cheques? If you are, then you should remember that interest may arise from the time the cheque first hit Ulster Bank, rather than from the time it was posted to the account. In these situations, interest can arise even though the bank staement always appears to be in credit. Was there any previous situations where you just got the credit into the account barely in time? Was the credit matched by a third-party cheque?

By the way, free banking never exempts you from charges related to unpaid cheques!

Thanks for that Gulliver, I seldom write checks and even more seldom receive checks and this is the only occasion that could possibly be in question. I understand that I would be liable to charges and that is why I didn`t query the 12.90 for the returned check.

So do you reckon the calculation is a correct amount?, I do have an overdraft of two thousand if that factors into the equation so I would have been overdrawn 86,201.64 thats including the overdraft of 2000. Do the sums add up?.

Looks like interest, surcharge interest and probably a one off fee as well for the unauthorised overdraft. But they will have to explain it to you.

Sounds extremely excessive. I would ask for a breakdown and then go to Financial Ombudsman.

Thanks everyone for your help. I have contacted Ulsterbank again and I am awaiting feedback, guess I'llhave to wait and see.
In the meantime, would I still have been considered overdrawn if the check was unpaid?.

Just had a phonecall from the local branch which informed me that although the charges were correct they will refund me the charge as they feel it is excessive and they will also forward me a breakdown of the charges.

Thank you all once more for your help.

Great outcome priscilla.

If they have an account with large deposits, they should treat it well.

Make sure to post the breakdown here, when you get the information. It may be useful to someone else.

Brendan

Just an update to say that the money was credited back to my account straight away; no sign of any breakdown of charges.