Cheques - do organisations 'check' signatures?

veryintrigued

Have just had an experience where my partner has used my cheque book by mistake rather then hers. We bank at the same organisation but different current accounts.

The worrying thing is that the cheque was accepted, cashed, cleared etc from my account with my partners signature (completely different first and second initial and different surnames and hence totally different signature !!).

Should I be startled as I am about the robustness of my banks checking procedures?

jimjames

For the millions of low value cheques that are processed every day, do you really think someone manually checks that the signature matches the account holder? In reality checks will be made on high value amounts or if queried but it isnt practical to expect every cheque to have the signature checked.

veryintrigued

jimjames wrote: »

For the millions of low value cheques that are processed every day, do you really think someone manually checks that the signature matches the account holder? In reality checks will be made on high value amounts or if queried but it isnt practical to expect every cheque to have the signature checked.

I guess I'd expect a similar amount of robustness as if I attempted to transfer a three digit amount in person, via internet or via phone banking.

veryintrigued

Interesting thread on this very subject:

https://forums.moneysavingexpert.com/discussion/1228957

opinions4u

it is much cheaper to correct an error or reimburse a fraud than to check the signature on every check.

Lose no sleep over it.

theGrinch

as said previously, the vast majority of signatures on cheques are not checked, however they are more questioning on larger amount. Where that threshold is is hard to say without insider knowledge.

Suffice to say its between £600 and £10,000 in my experience

mulronie

Simply put the banks have to make a cost-benefit analysis: losses to fraud versus costs to process.

A few months ago I took a (fascinating) tour of a cheque processing center used by multiple clearing banks. I was a guest of a particular bank, and they had an office in this site easily the size of half a football pitch full of people just checking various aspects of cheques drawn on them.

The bank I was visiting had a firm value below which signatures would not be checked, above which signatures would be software-checked. Any instances of signatures not matching the record would be flagged for operator review. And I do know the value threshold, and no I can't tell (although it's probably well out of date now anyway)

bowlhead99

You might be interested to know how the big banks are dealing with cheques in the US these days. If I write a check (sic) from my US account and it gets cashed and goes through my online statement, I can just click on the transaction to view a scan of the front and back of my cheque which shows exactly who I made it out to, how I signed it and even the stamp of the bank that received it and details of how/where it was paid in. https://online.citibank.com/JRS/forms/checkImage.html. The archive is online for a year or two and after that you'd have to phone them up.

If someone writes me a cheque, provided it's not for thousands and thousands, I can just select 'deposit this' on one of my accounts on the smartphone app, key in the dollar amount, endorse the back of it, take a photo/scan of both sides with their smartphone app, and presto it gets processed and credited to my account as if I'd physically walked into a branch and had them key it / scan it there.

These free features are standard with Citibank and others like JP Morgan Chase, and they also help you organise your utility bills, if you let them, by having the amounts and due dates appear on your banking screens with a click to pay (instead of just direct debiting you when the supplier wants the cash) ; they have the other newer methods of moving money to friends via email (like Pingit or Popmoney) and various other stuff.

So while unlike the UK they don't give away free current accounts (unless you meet balance or other requirements), they do have a bunch of extra services they take for granted, even for antiquated things like cheques!

veryintrigued

Some very interesting replies here - thanks for taking the time to reply to all.

So it seems that there is software out there to enable auto checking of signatures but that someone manually makes the decision which to check on, mostly, size of cheque and then funnels them down this route.

I'd be much more comfortable with a system that validated all cheques than risk someone fruadulently attempting to cash one of slightly lower than this £500, £600 etc barrier.

It does make me smile that banks (rightly) build in sophisticated layers of software and 'security' on internet banking, person to person banking and telephone transactions and yet I could quite easily use someone elses cheque book for say £500 and if they werent diligent (or tight as I am!!) they may not miss it.

Once again thanks for replying forumites - some good info here.

jimjames

veryintrigued wrote: »

It does make me smile that banks (rightly) build in sophisticated layers of software and 'security' on internet banking, person to person banking and telephone transactions and yet I could quite easily use someone elses cheque book for say £500 and if they werent diligent (or tight as I am!!) they may not miss it.

Once again thanks for replying forumites - some good info here.

The difference with security requirements for internet banking etc is that you "could" access someone's account from a computer anywhere in the world. To use a cheque you need to have access to that person's cheque book, already one factor of security that needs to be breached before the fraud is possible.

grey_gym_sock

the risk is more clearly with the bank, not the customer, with cheques than with internet banking.

because, AIUI (but IANAL), they are only entitled to debit a cheque from your account if it carries your signature. i.e. if it went to court and the court decided that it was a really good forgery, so the bank made a reasonable mistake, you'd still win. the only risk is that the forgery is so good that the court doesn't believe it's a forgery.

with online banking, the legal postition is less clear. the customer doesn't usually lose out if there is fraud, but the law is less helpful if the bank wants to argue about it.