Hamish received a £30,000 cheque, and deposited it into his bank account. The bank told him it would hold the money for 21 days. On hearing this, Sophia told Hamish to apply for a loan for half of the amount. He applied for a $10,000 personal loan, which the bank approved. Hamish sent Sophia the money via Western Union. The foreign cheque was dishonoured 10 days later, and the amount deducted from Hamish’s account, leaving a large debt.

Our investigation

He complained that the bank had not made it sufficiently clear the foreign cheque could be dishonoured, although he accepted he was advised verbally the bank would hold the cheque funds to confirm the payment’s validity. We reviewed the terms and conditions given to Hamish when he deposited the cheque. They stated that a 21-day hold would apply and that the cheque could still be dishonoured after the hold period ended. The receipt Hamish signed also contained the same information.

He also complained that the bank had not acted responsibly in approving his personal loan application because he was relying on the cheque clearing to repay it.

We reviewed the bank’s loan application assessment. The bank had applied its standard loan affordability assessment process, taking into account Hamish’s income and expenses. The foreign cheque wasn’t taken into account in this assessment and we were satisfied the personal loan was affordable given Hamish’s financial situation.

Outcome

We told Hamish the bank was not responsible for his losses.