Dementia and banking

A woman writes a cheque for $5000 in the middle of December. She has an overdraft arrangement for $1000 and she's already $250 OD. The bank honours the cheque, so the account is now $5,250 OD. Immediately any direct debit, of which there are many, because the woman's family has carefully set them up to manage the payment of her ordinary bills, incurs a $20 dishonour fee.

The woman continues to attempt to use her eftpos card, which is declined on every occasion. She, having early(?) dementia, forgets to follow up on why the card is declined, and is surprised every time it happens. She is also fiercely maintaining her right to control her own life, so doesn't draw it to the attention of any of the family.

The bank eventually leaves a phone message for the woman on the 13th of January, i.e. a whole month after the initial cheque, asking she phone them back. The overdraft issue is resolved as soon as possible, on the 17th.

The bank in the mean time has collected 13 dishonour fees, along with (so far) $50 in extra interest.

The bank has "generously" refunded $50 in dishonour fees.

The family should in retrospect have stepped in to monitor/control more closely, but these things are difficult to gauge.

In my view the bank has some responsibility for the mess in honouring the initial $5000 cheque, for which it would be fair to charge a dishonour fee.

What do you think?

Back in the days of "personal" banking with real bank managers, that may well have happened, but don't expect any such consideration from banks these days. They are only out to make money for themselves and their shareholders.
I once set up an automatic payment to pay monthly instalments for my house Insurance. I set it up to come out of my working account and for a while it did. Then I started getting dishonoured cheques and I had no idea why since that was an account I rarely used and therefore had only a minimal amount in it. When I went in to find out what was going on, I discovered the bank had transferred my AP to my cheque account, without informing me, citing "Their rule of not using APs on a saving account". I pointed out it was my working account, but that didn't seem to get through to them. I cancelled any further action, telling them my thoughts about banks meddling in insurance matters and went back to paying the Insurance company directly thus cutting them out of the picture.

The bank should have automatically bounced the $5000 cheque as it clearly exceeded the overdraft limit on the account. That said, my own bank has permitted me to go over my limit by small amounts numerous times without serious consequence.
Stikki, in your situation I would have been very tempted to tell them to stick it and change banks.

It does seem a rather large cheque to honour in relation to the size of the o/d limit, especially when the account was already overdrawn. I would at least make an attempt to gain some recompense. In our case with early dementia MIL, I hold her cash-flow card, OH has EPA, and I watch her bank account on-line like a hawk as she still retains her cheque book - she too is fiercely independent and thinks she is fine. Fortunately in our case, I think MIL is a little in awe of me, and thinks that only I can write out her cheques, and have her sign them.

It is a very difficult situation. The elderly rellie thinks she is fine, the younger ones with full faculties are busy with their own lives, and the banks don't care, and make money on it anyway. We told MIL that it was easier for us to hold her card so that we could do her shopping. She bought that line. We do have the advantage in that MIL thinks she is no longer mobile, and so can't go out by herself, though that then leads to another issue of having to trust her care-giver.

Good luck, I don't know the answer either.

i agree that the bank should not have honoured that large a cheq given the size of the overdraft limit.. the phone call from the bank should have come when that 5k cheq was presented to advise that it was way over the od..not a month later...i, personally, would be kicking up a stink..
i had an instance where a cheque i had written and made out to xyz person was cashed by a thrid party.. i had stern words with the bank asking how they could cash a cheq for someone not on the cheq..they refunded the money to me...

re trusting care givers.. oh grief.. i have an ancient relative who has lost alot of money and personal belongings because she thinks her caregiver is lovely.. we all know the care giver takes the old ladies cash card and, yes , does the old ladies shopping but also her own! and helps herself to jewelery and nick nacks..
its hard for me to keep track of where i put little things, must be impossible when 95.. so its easy for people to take advantage... grrr

Stink kicked up - or at least a very polite but clear letter.

My bank will not allow me to go $0.01 over my OD .. unless its them taking their bank fees .. they seem happy to allow it to go over OD limit for that .. but will bounce an AP if it goes over by $0.01
SO i would in basic terms Ruth " Be doing my nuts , as the cheque should have been bounced .. not everything else

As an "ex" banker I'd write a letter and ask them to refund all fees involved and maybe get a letter from the doctor.

They shouldn't have honoured it in the first place, but with a good banking record etc they would have done so to "save face for the customer involved". Sometimes its a no win situation because especially for the eldery who have been fantastic loyal customers all their lives, if they were to have a cheque dishonoured they would be mortified and very disgruntled with the bank.

I have had customers saying "but you can see I have all this money in another account, you should have honoured it" - although they constantly went over their overdraft.

It is a semi-automated system, so as long as you have a clear record it goes through without problems.

Again though, in this situation I would plead the case and I'm sure all fees should be refunded - unfortunately though sometimes its a case of "who you talk to". If it were me I would have refunded all, but I have colleagues that wouldn't be so understanding.

Good luck

try the banking ombudsman if you don't have any luck with the bank.. even threatening might get you the required action.

I've got this to look forward to as my mother seems to be heading this direction

stephclark;405888 wrote:

re trusting care givers.. oh grief.. i have an ancient relative who has lost alot of money and personal belongings because she thinks her caregiver is lovely.. we all know the care giver takes the old ladies cash card and, yes , does the old ladies shopping but also her own! and helps herself to jewelery and nick nacks..
its hard for me to keep track of where i put little things, must be impossible when 95.. so its easy for people to take advantage... grrr

We don't trust the caregiver, hence holding MIL's cashflow card ourselves. She still has her credit card, but doesn't know how to use it, or the PIN (OH does) and any accounts for the credit card come to us anyway. Yes, she thinks the caregiver is lovely, and that is a worry.

Glad a stink letter, even a polite one, was written, Ruth - there is too much of this sort of thing going on, whereby a human applies no thoughts in a process, because largely it is done automatically by computer.

I will take it to the Ombudsman, if that's the sort of issue dealt with there. It is quite ridiculous that the rules can work one way but not the other - in terms of the protection I had assumed the OD limit was providing against large withdrawals which could be suspect. In this case the $5000 cheque was a ligitimate one, but nobody had checked if there was sufficient money to cover it, and the limit should have raised an immediate flag, which would have prompted my action to take over the account monitoring a lot earlier, and saved all the hassle and the penalty fees. The fact that the owner of the account felt it was reasonable to write a $5000 cheque without checking her balances first, speaks volumes about her current financial awareness and abilities.

My mother is heading down this path as well To complicate matters we lost our family solicitor (Mum's EPA) to a sudden death late last year so I am currently rebuilding an official support network including EPA and the use of our accountant to act as 'minder' of her month to month financial affairs. Like you I found that the bank is all too happy to have her money in investments but weren't interested in keeping an eye on what was going where. Our situation was the inverse of yours however with my discovery of a bulging (non-interest earning) cheque account resulting from term deposit interest being credited to it

The progress of dementia means that the situation is very fluid and what works (and is tolerated by the sufferer) now needs continual updating as abilities and care levels change. In our situation we are now redesigning a care program that now requires in home (retirement village villa) care and can cater for the recent loss of Mum's drivers' licence. It is continually challenging and time consuming though thankfully my sister (a senior nurse) is helping shoulder the workload

I prompted the loss of driving some months ago, but her social functioning is still adequate. That actually makes it harder to get the help she needs in other areas, because she appears to be managing very well and insists she is, but is actually now unable to string a meal together without supervision or remember to phone people, or manage her own diary of appointments and social events, because she is completely unaware of the things she forgets within a minute of knowing them.

I feel quite mad myself, in having to deal with it all! With a strong family connection - both her parents and her elder sister - having Alzheimers, please feel free to contact Stephan if you notice me doing anything odd. [] Also please give generously to the Neurological Foundation to aid their work toward finding reliable tests and possible cures!

Ruth;406003 wrote: I prompted the loss of driving some months ago, but her social functioning is still adequate. That actually makes it harder to get the help she needs in other areas, because she appears to be managing very well and insists she is, but is actually now unable to string a meal together without supervision or remember to phone people, or manage her own diary of appointments and social events, because she is completely unaware of the things she forgets within a minute of knowing them.

I feel quite mad myself, in having to deal with it all! With a strong family connection - both her parents and her elder sister - having Alzheimers, please feel free to contact Stephan if you notice me doing anything odd. [] Also please give generously to the Neurological Foundation to aid their work toward finding reliable tests and possible cures!

One suggestion is to introduce Coconut Oil to your Mum's diet at the rate of 2 tablespoons/day. Feel free to Google the link between CO and mental degradation My sister who is normally sceptical of my 'natural' cure theories actually suggested this based on a friend whose parent can function with CO but founders without this input.

The problem is getting the sufferer to maintain the regime, which is where our situation falls down in this treatment

Thanks Organix, I've had a quick read - looks rather like it's based on energy needs of the brain, rather than addressing the more widely researched (more recent?) amyloid plaque theory. I'll get back to it a bit more deeply later in the day.