August 15, 2007 | posted by Pam Atherton in Banking |

First it was poor quality payment protection insurance policies, then it was penalty charges on current accounts and most recently unfair mortgage exit fees.

Now the banks are in the dock again because they say they won’t be able to meet the November deadline for introducing faster payment for money transfers made over the phone and the internet within the UK banking system.

Such transfers currently take three working days to reach the destination account, the same time it takes for cheques, even though you, I, and the banks all know that this is a lot of nonsense and the money is transferred within hours.

It’s just that the paying banks like to hold onto our money that bit longer, earning themselves a tidy sum, £30m a year to be precise, in the extra two to three days’ interest.

The Association of Payment Clearing Services (APACS) claims that the enormity of the project means that the banks cannot not meet the original deadline of November this year and that it is more important that they get the system right than that they meet a ‘self imposed deadline.’

That’s all fine and dandy but the banks came under fire from the Office of Fair Trading over this issue two years ago, having been a bugbear with customers for far longer.

Other countries, like Sweden have had near-instantaneous money transfers between Swedish banks for years, so it beats me why the UK banking system needs so long to introduce this much needed reform.

That said, the good news is that changes to the cheque clearing process are to go ahead as planned from November. Currently, a cheque can be rejected by a bank, days or even months, after it has officially been cleared.

From November, however, banks and building societies will be obliged to guarantee final cheque clearance after six days, unless fraud is suspected. Currently, some banks and building societies take 10 days to clear a cheque and even then customer cannot be sure that the money is theirs.

To read more on this visit

http://www.apacs.org.uk/<a href=”http//www.oft.gov.uk/news/press/2007/121-07