MSE News: MPs call for return of cheque guarantee cards

derbycockney

They just give people the excuse to say the cheque is in the post!!

Additionally, if a bacs payment goes astray it will either bounce back to the payer or the paying bank can trace it within 2 days.
Cheques cost businesses a fortune to process.

tagq2 wrote: »

Most cheques are written to people with other than personal accounts and the account holders will have to pay for cheque deposit. This will be reflected in higher item prices. As for everyone else...

For payment to people or groups without card processing facilities, i.e. bank transfer, you only have to enter one number incorrectly once on a large electronic payment to cancel out all the money you've saved from not paying a realistic chequebook fee. The Bank Account board right here gives an example every so often.

If banks actually had checksumming on the sort code+account number combination, or did some at least fuzzy check of the account holder name, or even gave a well-defined window in which FPs could be reversed, they might approach the consumer friendliness of cheques. Top this with the ability to confirm any direct debit set up on your account so someone with your account details can't immediately abuse it.

Oh, and that paper trail comes in handy when someone messes up. UK cheque fraud's very low, too: faking real stuff is harder than just recording and replaying the right keys where you shouldn't.

Cheques are slow. But they work. And although everyone insists that his life is so important and hectic that everything has to be done yesterday, sometimes it's worth waiting for what works.

/midweek rant :rotfl:

grumbler

derbycockney wrote: »

...Additionally, if a bacs payment goes astray it will either bounce back to the payer or the paying bank can trace it within 2 days.

Trace - maybe.
Reverse - it's definitely not simple if possible at all.

tagq2

derbycockney wrote: »

They just give people the excuse to say the cheque is in the post!!

A dishonest person can make up an excuse for why any payment method didn't work. Hey, we submitted that FP, maybe there's something wrong with your bank's systems? I'll leave a message for my supervisor. He'll call you in 48 hours, honest!

Additionally, if a bacs payment goes astray it will either bounce back to the payer or the paying bank can trace it within 2 days.

From 1 January 2012, good luck cancelling any electronic transfers via the system. Meanwhile, many bank T&C state that they may or may not intervene to manually reverse an incorrectly made electronic transfer, whether you're sender or recipient, and without clear timescales.

With cheques, unless there's been fraud, it's fairly clear what the timescales are.

It would be nice to have some simple semi-automated process for an accidental mispayment: (1) Sender makes claim within x days or claim fails; (2) Recipient must respond within y days or money returned; (3) If dispute, revert to manual, otherwise return money.

Cheques cost businesses a fortune to process.

So don't offer a discount for cheques. Electronic transfers are cheap but businesses rarely care to offer a discount unless DD. Reward preferred behaviour rather than taking away choice.

Gromitt

thenudeone wrote: »

How many people were without any access to cash a few weeks ago when a major bank's systems failed?

Only the people who have a single bank account. Those thinking there's always a single point of failure will always have multiple bank accounts. Having to travel home to get your cheque book out of the safe and then remembering how to sign your name so it looks roughtly similar to the one on your guarantee card would take longer than the duration of the bank outage. Far easier to have two or more cards available.

NFH

thenudeone wrote: »

With a cheque book and guarantee card, they could have obtained cash at loads of places.

Which places? Many shops don't accept cheques any more as payment for goods, let alone giving cash in exchange for an onerous piece of paper.

JuicyJesus

tagq2 wrote: »

It would be nice to have some simple semi-automated process for an accidental mispayment: (1) Sender makes claim within x days or claim fails; (2) Recipient must respond within y days or money returned; (3) If dispute, revert to manual, otherwise return money

Which is a nice idea except for it fatally compromising one of the benefits of Faster Payments and BACS, namely that funds received by it are cleared and irrevocable. There is also a substantial fraud risk in that. Imagine selling something (or if you're a business providing a service) and having the money deducted from your account because the person who sent it is a scumbag.

In short you'd have basically reimplemented cheques as an electronic system, with all the attendant drawbacks and none of the benefits. It makes far more sense for customers to simply pay attention to what they're doing and actually use the "double check" screen to double check what they've put in, rather than implementing a whole new costly procedure over the top of a system that works well.

rb10

tagq2 wrote: »

If banks actually had checksumming on the sort code+account number combination [...] they might approach the consumer friendliness of cheques.

They do. To see, put in your own sort code and account number to here: http://www.postcodeanywhere.co.uk/demos/bankvalidator.aspx, but with one digit incorrect. It will show up as an invalid account.

tagq2 wrote: »

Oh, and that paper trail comes in handy when someone messes up. UK cheque fraud's very low, too: faking real stuff is harder than just recording and replaying the right keys where you shouldn't.

There is a far more detailed an accurate audit trail available for online transactions. Just because you don't see it doesn't mean that it doesn't exist.

A_Flock_Of_Sheep

Excellent news. The sooner the CGC scheme returns the better. I hope as part of this the government will force retailers to accept guaranteed cheques again. I can't wait to get my cheque book and card out at the supermarket check out again!

Wayyhayyyy! Boohoo sux to you debit cards!

tagq2

JuicyJesus wrote:

fatally compromising one of the benefits of Faster Payments and BACS, namely that funds received by it are cleared and irrevocable.

BACS can be recalled unconditionally on same working day as sent. I'm proposing doing a bit better than BACS rather than doing worse as with FP. Anyway, it's only the FP/BACS system that prevents returns: your bank T&C will probably mention its privilege to return funds manually which it believes were wrongly credited to you.

There is also a substantial fraud risk in that. Imagine selling something (or if you're a business providing a service) and having the money deducted from your account because the person who sent it is a scumbag.

The proposal didn't suggest automatic return, but return on timeout. The wrongfully credited who is subject to a challenge within a certain number of days must somehow provide a declaration that the money is rightfully his: not proof beyond all reasonable doubt, but not a simple "I don't care - call the police 'cos I've spent it!" either. Consider the process when a Direct Debit is challenged (though I would anticipate the process not being quite the same).

The traditional dispute process can occur if the above fails to resolve matters.

rb10 wrote: »

They do. To see, put in your own sort code and account number to here: http://www.postcodeanywhere.co.uk/demos/bankvalidator.aspx, but with one digit incorrect. It will show up as an invalid account.

Added 1 to the sort code; still valid. Will be based on this, which makes it clear that for many banks the sort code is ignored in the validation (zero-weighted digits).

There is a far more detailed an accurate audit trail available for online transactions. Just because you don't see it doesn't mean that it doesn't exist.

A good audit trail is in multiple places and multiple forms: when sending a cheque I already have cheque copy, cheque stub, evidence of posting and/or paper receipt. For electronic transfers, the entity responsible for actioning is the same as the entity responsible for providing trail - it's a log but barely an audit.

spingoblin

A_Flock_Of_Sheep wrote: »

Excellent news. The sooner the CGC scheme returns the better. I hope as part of this the government will force retailers to accept guaranteed cheques again. I can't wait to get my cheque book and card out at the supermarket check out again!

Wayyhayyyy! Boohoo sux to you debit cards!

lol i hope i never get stuck at the back of the queue you're in:D