cheque guarantee problem???

jap11

We took a cheque from a customer of Barclays with a cheque guarantee card, wrote number on back of cheque and checked details etc. Cheque has been returned marked 'refer to drawer' and I have been told by my bank RBOS that just because a cheque has a card number on back it doesn't mean it is guaranteed!!!According to RBOS if the customer wrote out many cheques on that day he may have exceeded his limit and the bank doesn't have to honour the cheque! After making my bank -RBOS- call Barclays, the second excuse given is that we did not write the actual number of the guarantee limit on the reverse i.e. either £50 or £100 or £200 etc-- Is this correct? Comments please:mad:

zppp

jap11 wrote: »

We took a cheque from a customer of Barclays with a cheque guarantee card, wrote number on back of cheque and checked details etc. Cheque has been returned marked 'refer to drawer' and I have been told by my bank RBOS that just because a cheque has a card number on back it doesn't mean it is guaranteed!!!According to RBOS if the customer wrote out many cheques on that day he may have exceeded his limit and the bank doesn't have to honour the cheque! After making my bank -RBOS- call Barclays, the second excuse given is that we did not write the actual number of the guarantee limit on the reverse i.e. either £50 or £100 or £200 etc-- Is this correct? Comments please:mad:

There are circumstances where the cheque guarantee system will not apply to a cheque, namely if multiple cheques have been written out to an encashment service on the same day, and also in the cases of fraud - for example stopping a cheque book, and issuing a guaranteed cheque from that book.

Here is an information sheet outlining the scheme and the exceptions.
http://www.apacs.web-manager.co.uk/spot_and_stop/documents/UK_Domestic_Cheque.pdf

ru20205

I found out several months back that there is nothing in law which states that banks have to accept and pay on a cheque which has been endorsed by a guarantee card and infact a lot of companies are no longer accepting them as their banks are under no obligation to pay out on them and some have now refused so they are no longer taking them from customers as payment.

Apparently this is becoming more and more popular amongst banks, not accepting cheques regardless of whether they have been guaranteed or not.

My advise, if your a business, would be to no longer accept cheques from customers, cash or card only seems to be the way and it will only be a few more years then cheques will become obsolete anyway.

(I think i heard somewhere by 2014/15 banks will no longer issue cheque books, but will allow customers who still have them to continue using them until they run out, or something like that, i could be wrong, but thats what i read.)

premierfella

jap11 wrote: »

We took a cheque from a customer of Barclays with a cheque guarantee card, wrote number on back of cheque and checked details etc. Cheque has been returned marked 'refer to drawer' and I have been told by my bank RBOS that just because a cheque has a card number on back it doesn't mean it is guaranteed!!!According to RBOS if the customer wrote out many cheques on that day he may have exceeded his limit and the bank doesn't have to honour the cheque! After making my bank -RBOS- call Barclays, the second excuse given is that we did not write the actual number of the guarantee limit on the reverse i.e. either £50 or £100 or £200 etc-- Is this correct? Comments please:mad:

Excuse 1: I'm happy to be corrected but that is the bank's problem - when they issue a cheque book and guarantee card they are accepting the risk that the customer can walk straight out the door and write out guaranteed cheques to different people/companies at any time - 25 cheques+£100 guarantee card=£2500 risk for them;
Excuse 2: spurious nonsense IMO.

However, the difficulty for you is having to waste time and energy chasing the cheque value from Barclays, who are effectively providing the "guarantee" in this case as I understand it. I don't see how you can make your bank (RBOS) responsible for crediting your account with the money (they probably have gone beyond their absolute obligations by making the phone call). And you may still find that they come up with a third excuse which will hold water (banks know all the get-outs, which put them at an advantage here).

withabix

The person who wrote the cheque will have done so knowing that there were insufficient funds to support the cheque.

Otherwise they would have paid in cash or by card, assuming you have the facility to process cards.

Why else do you think they wrote a cheque?

Also, IIRC, the guarantee limit probably doesn't have to be written on the back of the cheque. The signature needs to match the bank's records, the card must not have expired.

The cheque must not have been more than the guarantee limit on the card (£50/£100/£250). Writing the guarantee card limit on the back fo the cheque is a physical test that you have checked the card limit, although I don't believe that is compulsory.

magpiecottage

Banks are currently phasing out the cheque guarantee scheme and new debit cards etc. do not include a guarantee.

However, if the card genuinely had a guarantee on it then the problem lies with Barclays and you can complain. If necessary you can take it to the Financial Ombudsman Service - see here.

jen245

Got my new debit card from Natwest at the end of August with a £250 cheque guarantee, so not all banks have stopped issuing cheque guarantee cards, although as its not going to be in effect from June next year, they should really stop issuing them now

zppp

jen245 wrote: »

Got my new debit card from Natwest at the end of August with a £250 cheque guarantee, so not all banks have stopped issuing cheque guarantee cards, although as its not going to be in effect from June next year, they should really stop issuing them now

They will very shortly Natwest/RBS as they are moving to Visa Paywave over the coming months, and will send yet more debit cards out very soon. (over the next 12 months)

jen245

Paywave, are those the contactless cards like the cards that Barclays issue?

zppp

jen245 wrote: »

Paywave, are those the contactless cards like the cards that Barclays issue?

Absolutely

jen245

Lovely, might just have to "lose" my card when those come out