Banker's Draft query

pinkdalek

Hi Pinkie, firstly do not hand any more monies to the other party. Paying by draft is equivalent as a cash payment so you have no come back. Don't worry about the other person threatening you with fraud or the police. Let them contact the police if they have to, you've done nothing wrong, you have given them the draft, it is them who have lost it.

Anyway your bank should be able to stop a bankers draft if it is lost or stolen. Your account cannot be refunded until the bank receive written confirmation from the payee that the draft is lost. Once this has been received then you are in a position to pay again. The bank will normally re-issue a replacement draft for you and there should not be a fee.

If the recipient has genuinely lost the draft then they should fully understand the procedures required and if they want payment then they will have to confirm that the cheque is no longer in their possession.

If the recipient is reluctant to do anything, then just be blunt with them, don't feel worried about the police being involved, you've done nothing wrong, if it is a con then these people use such threats to make you panic and issue more monies when you are not in the wrong.

bengalknights

Tell the payee to go to the police and report it lost.Then when they get the report ask for a copy to present to the bank this should then help them in getting it cancelled (theoretically).

pinkie84

Thank you for all your help.

I have finally had a definitive answer from Natwest.
Just to confirm, a banker's draft from Natwest is guaranteed. This is because you have to have cleared funds in your account when the draft is raised. Upon raising the funds, the amount is debited from your account and held in a reserve account. Funds are only released when the payee presents the draft to their own bank. It then takes a week for the draft to show cleared funds in the payees account since their bank will do the necessary checks to ensure this draft isnt forged.

With regards to this issue, NatWest cannot put a "Stop" on the bankers draft. This is because the money is no longer mine, it belongs to the person to whom the draft is addressed. If I wished to re-issue the draft, I would have to sign an indemnity form, making me liable if both drafts are presented by the payee. Obviously this is not something I am willing to do!

I am not sure if/when the draft expires, and what happens to the money then. If it is reimbursed into my account I will do the honest thing and contact the payee to organise payment again, despite her aggressive and threatening behaviour!

pinkie84

[FONT=&quot]Thanks for your help all.

I have finally had confirmation from NatWest about this.
The draft cannot be stopped, since the money is no longer mine to stop.
I am able to issue a replacement draft, but as Noh said with Barclays, NatWest have asked me to sign an indemnity form making me liable for both amounts of money, should both drafts be presented by the Payee. Effectively a replacement draft does not cancel the original draft, and there is actually no way of cancelling the original.

Since this is not someone that I know and trust, I am not going to reissue them a draft and potentially be conned, so unfortunately for her she is going to have to either find the original or be out of pocket.

I'm not sure if/when the draft ever expires, and what happens to the money then. If it's reimbursed to me then I will contact the payee and give her what she is owed, despite her aggressive behaviour!

Tough lesson to learn for the payee, I'm glad I came on here for advice since your responses ensured I double checked with NatWest about my liability over the original and replacement drafts. The first time I spoke to them they didnt mention this!
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jonesMUFCforever

I m surprised that they say that it could not be stopped.
The bank can stop its own cheques just like a customer can.

Why not get her to sign an indemnity to you if the bank require you to sign one?

Finally one question how much was the cheque for and was it a real bankers draft or a bankers cheque?

pmduk

Would you take an indemnity from someone you don't know? I certainly wouldn't. The bank in this case would only chase the OP who would be left with a worthless piece of paper.

OP I'd remind the other party that the banker's draft is like cash. She couldn't chase you had she lost the cash, so why does she feel she can chase you for this?

System

jonesMUFCforever wrote: »

Why not get her to sign an indemnity to you if the bank require you to sign one?

Because, as the OP now knows thanks to posters here, this is 100% her problem, just like if she had lost cash?

Finally one question how much was the cheque for and was it a real bankers draft or a bankers cheque?

What's a 'real' banker's draft? I thought a banker's draft was a cheque issued by a bank promising to pay a named payee with the bank's own money (this money being derived from the customer who requested the draft)? I also thought that such a draft is drawn on a particular account ("Head Office no 2 account", or whatever), with a sort code and account number as usual. I assumed the theory was that it won't bounce unless the bank fails. Can't find a picture of a real one on the internet, though there a plenty of pictures of fakes!

jonesMUFCforever

pmduk wrote: »

Would you take an indemnity from someone you don't know? I certainly wouldn't. The bank in this case would only chase the OP who would be left with a worthless piece of paper.

OP I'd remind the other party that the banker's draft is like cash. She couldn't chase you had she lost the cash, so why does she feel she can chase you for this?

It's not that simple.

eg you send a cheque to a supplier for £x amount of £.
They claim to lose it - you cannot say sorry tough luck you still owe £x.
You can deduct a small amount to cover any cost of stopping original cheque and getting a new one.

OP still owes £x in this case - a bankers draft is not like cash in this instance.

jonesMUFCforever

YoungNick wrote: »

Because, as the OP now knows thanks to posters here, this is 100% her problem, just like if she had lost cash?

What's a 'real' banker's draft? I thought a banker's draft was a cheque issued by a bank promising to pay a named payee with the bank's own money (this money being derived from the customer who requested the draft)? I also thought that such a draft is drawn on a particular account ("Head Office no 2 account", or whatever), with a sort code and account number as usual. I assumed the theory was that it won't bounce unless the bank fails. Can't find a picture of a real one on the internet, though there a plenty of pictures of fakes!

A real bankers draft is issued from a Head office account normally for amounts over £25k.
Smaller cheques sometimes called Managers cheques are similar but drawn on a branch of the bank.

IMO stop instructions can be put on both types once it has been established that they have not been presented for payment.

Sceptic001

According to the Financial Ombudsman:

Although a banker’s draft may look like a
cheque – and is processed through the
banking system in a similar way to cheques
– it is not legally a cheque. A banker’s draft
is written by the bank itself on its own
head-office account – and is made payable
to whoever the customer wants. Unlike a
cheque, a genuine banker’s draft cannot be
stopped – even if it is lost or stolen.

http://www.financial-ombudsman.org.uk/publications/factsheets/cheques.pdf

This is in accord with the advice that OP eventually got from the issuing bank.