Backwards step in clearing cheques

NOWSE

I went into my local HSBC branch today to pay in a cheque drawn on one of its customers (my parents) for the credit of my account with a nearby HSBC branch. As I want to use this money asap I enquired when the funds would show as cleared. I had expected the answer to be either today or tomorrow. The answer was in 4 working days. Both the cashier and the manager/chief sales person claimed that this was to give the writer of the cheque time to "stop" it. Claiming that this was a security proceedure. When I asked what would happen if I'd also banked at that branch the manager said that further checks would be made before I was allowed to have the funds, refusing to elaborate on what these enquiries might be.
Not so long ago the cheque would have been classed as "paid" when I paid it in.
I keep reading that the banks are working towards bringing the time taken to clear cheques down. Obviously not at HSBC>

Milliebob

At the bank I work for, in the last couple of years there has been a massive uplift in the number of 'onus' cheque frauds- criminals paying in fraudulent/stolen house cheques which they know will clear immediately, then spending the money and never being seen again.

Unfortunately this has meant that all house cheques are checked thoroughly and if in any doubt at all are put through the full clearing cycle.

Same as always, those dishonest few making things more inconvenient for the rest of us!

dalesrider

NOWSE wrote: »

Not so long ago the cheque would have been classed as "paid" when I paid it in.
I keep reading that the banks are working towards bringing the time taken to clear cheques down. Obviously not at HSBC>

It would not be classed as paid, when you paid it in. Unless you had paid for special clearance.
It will show in your account the same day as its paid in at a branch. But not in your available funds. Till day 4 and even then it can still be claimed back if its fraud for a further 4 days.

Time cheques were dumped. There are enough other methods of payment now for this outdated form of payment to be retired.

Why did you parents simply not make a faster payment straight to your account, if you have such a fast need to access the funds.

Fraud on cheques seems to be on the up. Thankfully due to dillagence at branches most of these never get any further than the branch counter.

pinkdalek

If you are that desperate for the funds sooner then have them send a faster payment direct to your account.

agrinnall

OP, if you really want to understand cheque clearing, read this:

http://www.chequeandcredit.co.uk/cheque_and_credit_clearing/cheque_clearing_timescales_%282-4-6%29/

NOWSE

dalesrider wrote: »

It would not be classed as paid, when you paid it in. Unless you had paid for special clearance.
It will show in your account the same day as its paid in at a branch. But not in your available funds. Till day 4 and even then it can still be claimed back if its fraud for a further 4 days.

Time cheques were dumped. There are enough other methods of payment now for this outdated form of payment to be retired.

Why did you parents simply not make a faster payment straight to your account, if you have such a fast need to access the funds.

Fraud on cheques seems to be on the up. Thankfully due to dillagence at branches most of these never get any further than the branch counter.

You haven't read my post (or perhaps understood it) The cheque was drawn on the branch I was paying it in at. As someone who worked for the Midland Bank for over 25 years I can tell you that the proceedure was that, as the cheque was paid in, it was scrutinsed by the cashier and became a paid item at the end of the day. It could not be stopped the following day. There would be no special clearance involved. The cheque would not have entered the clearing system.

My parents are nearly 90 & do not do internet banking.

I'd hazard a guess that banks loose more money as a result of fraud through internet/electronic banking than they do through cheque fraud.

NOWSE

agrinnall wrote: »

OP, if you really want to understand cheque clearing, read this:

http://www.chequeandcredit.co.uk/cheque_and_credit_clearing/cheque_clearing_timescales_%282-4-6%29/

The cheque would not enter the clearing system.
ps I do understand banking. Unlike Fred Goodwin et al I have my banking exams.

YorkshireBoy

NOWSE wrote: »

As someone who worked for the Midland Bank for over 25 years I can tell you that the proceedure was that...

Your experience is from over 20 years ago. Banking fraud has increased significantly since then.

I'd hazard a guess that banks loose more money as a result of fraud through internet/electronic banking than they do through cheque fraud.

The the current situation is generally as follows:

The latest payment fraud losses for 2011, released today (7 March 2012) by the banking and card payments industry show that credit card, debit card and online banking fraud levels have fallen again. This continued success is thanks to efforts by the industry, partners, and importantly, customers. Fraudsters’ activities in other areas have caused a minor increase in cheque and telephone banking losses.

http://www.financialfraudaction.org.uk/cms/assets/1/end%20of%20year%20fraud%20figures%20final.pdf

Cheque fraud losses, specifically, saw an increase of 17% in 2011 to £34.3m

dalesrider

NOWSE wrote: »

You haven't read my post (or perhaps understood it) The cheque was drawn on the branch I was paying it in at. As someone who worked for the Midland Bank for over 25 years I can tell you that the proceedure was that, as the cheque was paid in, it was scrutinsed by the cashier and became a paid item at the end of the day. It could not be stopped the following day. There would be no special clearance involved. The cheque would not have entered the clearing system.

Sorry, but Midland bank was a long time ago... Banking has changed beyond all recognition since then.
I was a customer of theirs, so know how long ago that was. And can remember getting paid via cheque and cashing over the counter for cash.

The link agrinnall gave is the process now.

pmduk

I understand most banks process house cheques through the clearing system now. I know that you believe it to be a backward step, but cheque use is falling so dramatically and becoming more expensive to process you really can't expect banks to concentrate on this area.

Milarky

pmduk wrote: »

I understand most banks process house cheques through the clearing system now. I know that you believe it to be a backward step, but cheque use is falling so dramatically and becoming more expensive to process you really can't expect banks to concentrate on this area.

You've just reminded me of that notorious day in 1990 (about October) when 'the banks' (Nationwide actually, but everyone else at the same time too, it seemed) would no longer pay interest from 'day 1' on a cheque - it became 'day 4' instead I think. This change of course saved interest on those relatively few cheques which were going straight into savings accounts but had absolutely nothing to do with the archaic 'clearing cycle' (which was longer than now and varied from place to place) so it wasn't done with any fraud prevention in mind.