MSE News: Cheques to disappear by October 2018

John_Pierpoint

olly300 wrote: »

You can take people to court over not paying invoices regardless of which method of payment you agreed with them if they don't pay the invoice on time after a reminder.

Just for the record with my business account all BAC payments in and out are free. There as cheques payment after a limited number of free ones are charged for.

You are missing the point: A cheque is a "promise to pay" that you have signed; it is NOT the same thing as the original contract. It can be sold, even now to the likes of "Cash Converters".
Perhaps we should go to the French system where bouncing a cheque is criminal?
I think the present situation in the UK is about right.

I would be happy to pay £1 a cheque for settlement there and then. Perhaps even a fiver in certain circumstances to minimise the risk of getting involved in litigation extra book keeping and delays..
(If you were a barber how many months credit would you be happy for a customer to take? - That is a hypothetical question - I don't cut hair)

Extant

John_Pierpoint wrote: »

Yes but the supplier then gets all bogged down in counter claims that there was something wrong with the goods and services provided. If you have given a cheque, you have to explain why you paid for self evidently faulty goods & services - much more difficult to try it on.

A counter claim in a case without a cheque would require some sort of evidence of a dispute about faulty goods.

This is assuming the scenario is even that common, which it's not.

Extant

John_Pierpoint wrote: »

You are missing the point: A cheque is a "promise to pay" that you have signed; it is NOT the same thing as the original contract. It can be sold, even now to the likes of "Cash Converters".

And? The legal protection exists regardless because of the contract between two parties. A contract contains a promise to pay and may legally constitute a bill of exchange, promissory note or both in its own right.

It's not that we're missing the point, it's that you're advocating an entire payment method on the basis of surplus protection that is of use to very, very few (if any) and of a very minor risk that is mitigated by most companies.

John_Pierpoint

I have already given the practical example of being given a cheque by someone who promptly dies on you !

I used to work for an import company that distributed world wide production in the UK market, of the 150 employees five of them worked in the Credit Control department - their job was just to identify "dodgy" customers and chase slow payers ie I'm not talking about accounting clerks. I worked as a glorified sales clerk. We were very flexible organisation. It was not just the likes of GEC who would try it on - we managed to keep one customer staggering on for 3 months after nearly all their other suppliers had cut them off. We took the attitude that the goods already supplied were already a write off - so if they paid 500 quid we would supply another 500 quid of raw materials. We agreed a schedule of deliveries and post dated cheques and probably made more money than those who simply refused to deliver.
After 3 months the directors of the defaulting company managed to sell the business on the understanding that the creditors would accept bills of exchange for 1000 days time. A big saving on redundancies, job seekers allowance, ridiculous bank charges andexpensive liquidator fees.

Let us agree that there is a difference between a bill of exchange and the underlying contract and leave it at that.

Extant

John_Pierpoint wrote: »

I have already given the practical example of being given a cheque by someone who promptly dies on you !

Oh yes, an everyday occurrence... I don't recall you providing this example, but perhaps I've over looked it.

A cheque or any debt outstanding at death should be settled from the estate. What am I missing here?

Let us agree that there is a difference between a bill of exchange and the underlying contract and leave it at that.

Yes, there typically is a difference. But this difference means nothing - it doesn't make a trade somehow safer or provide any extra level of protection that isn't there in the law anyway.

If there was a sincere need for a legally recognised bill of exchange or promissory note, then once could easily be crafted and signed.

John_Pierpoint

Extant wrote: »

A cheque or any debt outstanding at death should be settled from the estate. What am I missing here?
Yes, there typically is a difference. But this difference means nothing - it doesn't make a trade somehow safer or provide any extra level of protection that isn't there in the law anyway.

How many people die in Britain?

The answer is 2,000 a day so it is not that uncommon.

This is not quite the situation but let me give it as an example of why the cheque being unrelated to the underlying transaction is useful:

Let us suppose it was payment for collecting a lovely old boy's "top shelf" S&M magazine subscription, because he was not able to get out in the current weather.

When the cheque bounced and the executors, who were nasty grasping folk, naturally wrote to me saying "Explain what this is all about". I was able to write back saying "This is a valid cheque, just pay it". (Obviously I was more tactful than that but that was the message).
You want me to get involved in some long uncertain rigmarole of getting the local newsagent to verify my claim while I at the same time I besmirch the reputation of a respected old gent?

That is not my place. A signature draws a line in the sand.

Law is expensive and is not always the same thing as justice.

Extant

I'd like to say that's an interesting tale considering your previous post stating you provide "personal services."

And no, I wouldn't expect you to get involved in that situation. But your example is a rare one if best, and as said, doesn't justify the continued maintenance of cheques as the situation could be resolved in other ways. I'd also argue that it's as simple as just having a signed cheque - it's not as if forged cheques don't exist, and it's not as if people don't try to defraud estates in a similar manner, either. Family members who find cheque books, etc.

cabbagegreen

As a chiropodist I visit mainly elderly people and many pay me by cheque because they are housebound.

This issue has got many very worried about how they will pay me, the hairdresser, the cleaner, the gardener, the grocery deliveryman, etc. I am more than happy to accept a cheque as a self-employed small business as I don't like carrying too much cash with me.

Many of my patients are blind or partially sighted so using the internet (if they even knew what the internet is) is impossible and most are too deaf to be confident using the phone. Family live too far away to help or are too busy and friends and neighbours are all getting older. Credit and debit cards are generally not trusted by this generation so the majority do not have them or cannot remember their PIN.

So far, I haven't heard of a good alternative to using a cheque for these people so I have been unable to reassure them. Hopefully, in the next 8 years there will be an answer to all these problems.:huh:

Merry Christmas!:xmassmile