HSBC Bank and foreign cheques

chrisjw1972

I receive a cheque each month from Cafepress.com (the t-shirt people), which arrives by snail mail in US Dollars. As soon as I receive it, I go to the local HSBC bank in person and pay it in. This has been going on since early 2006.

They have two ways to deal with foreign cheques.

1. Negotiation - the funds are credited to your account pretty much straight away (in practice one working day, usually), and they go off and get the funds from the payer, with the understanding that if the cheque bounced, the bank want their money back from me.

2. Collection - the bank applies directly to the paying bank for the funds, which takes anything up to 8 weeks to achieve, for some reason.

99% of the time, my cheques go for negotiation. Since the cheques come in monthly and from the same source, it seems reasonable to think that they can see a pattern and that none of the cheques have ever bounced.

I paid one in on 24th November, and received a letter a few days later telling me that the cheque had been collected, and the funds will be paid into my account "in due course".

I called HSBC today to try to ascertain what the criteria was for a cheque to be sent for collection rather than negotiation, and was told that it was a random "security check" and there was nothing that I, or they, could do about it, because it was down to "The System".

Now then. The British Bankers' Association Code of Conduct says this:

9.14... - Customers should also, when paying in foreign cheques, be told what happens; for example, whether their cheque is to be negotiated or collected, and estimate of how long it might take the cheque to clear and the costs involved. If the cheque is paid in by post, this explanation should accompany the acknowlegdement or receipt.

(link to that text here)


Since my cheques are paid in in person, not by post, I take that to mean that the person who serves me in the branch should be telling me what will happen to that particular cheque. In fact, the lad behind the counter did actually say "that'll be sent off for negotiation" when I paid it in, but it didn't sound like formal notification, if you know what I mean. Of course, I have no way to prove that he said that because I foolishly don't record every conversation I have with people in shops and banks.

I spent 55 minutes on the phone to HSBC this morning, and spoke to 3 different people, the last of whom wanted to know why I had been put through to her because she had no way to look at any of my details.

Appalling service, and totally unreasonable that it's a lottery when I put a cheque into the bank whether I can get access to the money two days or eight weeks later!

I've got bills to pay - what do they think people use money for?

olly300

Can't you get the foreign company to send you the money by electronic bank transfer? It's quicker and safer.

Unfortunately normal bank clerks who work at the counter generally don't know the ins and outs of accounts, and what happens behind the scenes. So unless you specifically talk in a branch to a branch manager or customer relationship manager anything coming out of the staff members mouths should not be counted on.

It's not appaling service it's the way all banks and building societies conduct their business and I'm currently with 4 different ones and have used another 2 in the past.

BTW if you press any bank on the issue they will tend to give you the longest time taken to clear a foriegn cheque to cover themselves against complaints.

duff67

Always a "bone of contention".

Foreign cheques can take weeks to clear (clear = getting the actual money from the drawee's Bank)

Negotiation is when the Bank allows its customer the money "upfront" so to speak, and as you say chrisjw1972, you sign an indemnity in favour of the Bank in case the funds are not forthcoming.

Collection is where no "upfront" money is made available and the customer waits for the drawee's Bank to act.

I've known money take longer than 1 - 2 months to appear. From the British Bank point of view this is a nightmare as the only way of getting the funds is to ring the drawee's Bank and attempt to speak with a kind soul there !!.

Randomly, as fraud prevention some cheques are collected. In escence fraud prevention is in the customers best interest and should be an expected part of your transactional paying in.

It should only happen occassionally, but the question has to be...would you rather the Bank make random checks for their and your comfort, or just go with the flow to the customers detriment..

Good point Olly300 - Electronic Bank transfers the way to go IMHO.

bitsandpieces

To be fair on HSBC, UK banks in general are often terrible at dealing with foreign cheques (the first three I asked seemed to make it a tremendous faff). As has been said, electronic transfer is probably best. I ended opening a citibank account, though: they do a free US dollar account for UK citizens, with no fees for cashing cheques, and they deal with larger-than-usual cheques by negotiation; recommended, if you need to deal with $ cheques.

KxMx

HSBC do offer foreign currency accounts, would this work out any better? I get the odd cheque from Grandparents and always change them via https://www.auctionchex.com

mikeyT25

I deposited 2 cheques into my lloyds tsb account on the 2nd of january. Both of the cheques together equaled over $100,000 usd. Ive tried asking my bank how long the cheques will take to be credited to my account and what the process is for such high vale foriegn cheques but can't get a staight answer.

Can anyone help me with this?

bitsandpieces

It could, potentially, take months - I'd very much expect that such large cheques will be dealt with by collection. Depends how long it takes for them to get money from the US bank, etc. I'd persevere with Lloyds, though - hopefully they can give you a more precise answer.

Sorry, probably not what you want to hear. Looking on the bright side, if the pound keeps falling against the dollar, you could profit slightly based on the exchange rate.

mikeyT25

Okay thanks for the help. I will carry on speaking to lloyds and see if I can find out the exact procedure.

I'm just really nervous about the whole thing i've never had this much money before and I want to make sure I dont make a mess of it.

mikeyT25

Okay thanks for the help. I will carry on speaking to lloyds and see if I can find out the exact procedure.

I'm just really nervous about the whole thing i've never had this much money before and I want to make sure I dont make a mess of it.

pulliptears

mikey, if you dont mind me asking, why have you recieved such a large sum of money?

the reason I ask is a common fraud where someone from overseas will buy a £100 item from you but send you a cheque for £500 so you can forward the rest to a friend. By the time the banks realise the cheques are fake you have forwarded £400 of your own money and the item.

mikeyT25

The money came from family in america. They are doing quite well for themselves over there. Me and my girlfriend have just had a baby back in november so the money is to help towards buying a house.