anyone know the laws on cheques?

dawn_b

Hi,

someone gave me a cheque that bounced. I have been charged £5.50.

Cheque was dated 1st Feb and posted in late Jan.

The post arrived sooner than 1st Feb and the cheque was processed on Jan 30th. There were not enough funds in their account and the cheque bounced.

Had it been processed on Feb 1st there would not have been a problem.

So,
1) is it allowed for them to present a cheque early?
2) is the £5.50 charge reasonable and lawful?

Thanks in advance,
Dawn

oldwiring

From the BBA website:

Sometimes customers 'post-date' a cheque. This is a date in the future and essentially means that the customer intends that the bank will not pay the cheque earlier than the date inserted on the cheque. If a post-dated cheque is paid in before the date on the cheque the bank may pay it or return it marked ?post-dated'. Most banks do not encourage post-dating cheques. You should be careful to ensure that a post-dated cheque is not presented to a bank before the date on the cheque. Some banks state in their terms and conditions that they will pay a post dated cheque on first presentation if the cheque is otherwise in order.

In the old days every cheque was scrutinised, but with increased volumes an centralised processing that is no more. It has always been danferous to issue a post dated item and to pay one in to one's account before the due day definitlely foolish.

Bossyboots

Why have you been charged for a cheque that bounced in these circumstances? It is usually only when your own cheque bounces that you have to pay so this should be down to the drawer of the cheque, not you.

Mark7799

Dawn,

Is your account a business account?

iceicebaby

I believe it is against the law to write a post dated cheque ??

newfoundglory

iceicebaby wrote:

I believe it is against the law to write a post dated cheque ??

I dont believe its unlawful.... but it is against the terms and conditions of virtually ever current account.

Chadsman

A cheque is a written instruction from an individual to a bank to pay another person a certain amount on a certain date. Postdating a cheque 'should' mean the bank wont process your instruction until that date.
Many/most accounts have a clause saying words to the effect you are not allowed to write post dated cheques but if you do they will act on the instruction when they receive it irrespective of the date on the cheque.

squashy

newfoundglory wrote:

I dont believe its unlawful.... but it is against the terms and conditions of virtually ever current account.

That's correct, banks don't allow post dated cheques. The only time one should be used is where the drawer has agreed with the payee that they will not bank it until this date. Eg by giving a builder a deposit for a conservatory but agreeing they won't bank it until work has commenced.

The drawer is likely to have been charged lots more too, about £15

s1h

Cheques are a waste of time I try to never use them these days.

s1h

It is unbelivable that in this day and age they can take so long to clear.

PaulW922

dawn_b wrote:

Hi,

someone gave me a cheque that bounced. I have been charged £5.50.

Cheque was dated 1st Feb and posted in late Jan.

The post arrived sooner than 1st Feb and the cheque was processed on Jan 30th. There were not enough funds in their account and the cheque bounced.

Had it been processed on Feb 1st there would not have been a problem.

So,
1) is it allowed for them to present a cheque early?
2) is the £5.50 charge reasonable and lawful?

Thanks in advance,
Dawn

To answer your second point Dawn - the charge is unusual for a personal account but not unknown. £5-50 is probably a bit high but we are only talking about a few ££ here. I'd go back to the person whose cheque was returned and ask for payment by another means, including the £5-50 charge you incurred - that is a quite reasonable course to take. Alternatively if you have a good relationship with your bank there is nothing to stop you asking for it back