Bounced Cheque - advice needed please

glicky

I did a focus group recently for a company and they paid me by cheque! I paid in the cheque but 5 days later I got it back with a letter saying that it had bounced and I should "refer to drawer".

I called the company and the accountant was most apologetic :rolleyes: and he took my bank account details and said that he would transfer said amount into my bank that day (which was Monday 11th June). Well, so far that amount is not in my account! Surely it doesn't take 4 days for a bank transfer. I said to him that if the money isn't in there by close of business on Friday I will have no option but to take further action. He assured me he was going to transfer the money as soon as he put the phone down to me :rolleyes:

I tried to call the accountant today, but guess what? He was unavailable. I left a message and asked for him to call me back, but guess what? No phone call. I feel I'm going to have trouble here :rolleyes:

Any idea what I can do please? What sort of letter should I write or what action can I take?

Your kind help and advice would be much appreciated. I'm not very good at writing "official" letters.

Thanks in advance.

Bean_Counter

If he did a BACS transfer before 4pm on Monday, it would have been in your account on Wednesday morning. Hence he obviously has not done it.

If you do speak to him again, ask for a CHAPS transfer. This is a same day electronic payment. If he then moans about the £24 bank charge for this, say tough, if he had actioned the original payment when he should then it would have been avoided. Hence it is his fault.

jonesMUFCforever

Best thing I can advise is let your local paper know. If they report it, it will hurt them a lot more than a court action which you may well win but if the company goes bust then you lose again (your court fees).

glicky

ejones999 wrote: »

Best thing I can advise is let your local paper know. If they report it, it will hurt them a lot more than a court action which you may well win but if the company goes bust then you lose again (your court fees).

I don't live in that area, but I could still get in touch with their local newspaper couldn't I?

Is there a sort of "threatening" letter I could write informing them of this before I do take that action or should I just take get in touch with their local newspaper?

I'm wondering if there is a Market Research Ombudsman or something similar?

jonesMUFCforever

To be honest if they have done this to you then they have probably done it to others. I think you would be very unlucky if it was done to you in isolation.

Do you think that the company will get paid by its customers? Of course it will but a straight RD cheque IMO spells big trouble.
Again purely my opinion chase it up by whichever way you are comfortable with but DON'T spend any money on it.

It may be that you will never see a penny.

zzzLazyDaisy

If you do decide to commence proceedings, you should claim for a dishonoured cheque rather than breach of contract or debt. The reason is that there is no defence to a dishonoured (ie bounced) cheque. You should ask your bank for the cheque and enclose a photocopy of both sides with the claim.

A sample particulars of claim is here -

http://www.compactlaw.co.uk/free_legal_precedents/preced2n.html#Dishonoured

BUT as others have advised, there is a court fee and if the company are in serious financial difficulties they may well go into liquidation leaving you having thrown good money after bad.

If you do intend to start court proceedings you must write and warn them of this first.

LittleVoice

How much was the payment for the focus group? Were you simply a participant or were you professionally involved?

Unless you were a self-employed facilitator, then I imagine the fee is relatively small and therefore expending money on chasing this is wasting your time which could be spent more profitably.

I know it is annoying to have given your time for no financial reward (in fact a negative return as things have turned out) but other than learning how using court proceedings operate I don't think you will really gain from proceeding along that route. Better to move on.

Willman_Rodders

Hi glicky,

Just to expand upon a couple of points ...

The normal cycle for a Bank when returning cheques is ...
When a company/business/customer has a cheque presented for payment their banker has to decide whether to pay it or not. Cheques can be returned for technical reasons - 'Not signed', 'No date', or because the drawer of the cheque (i.e. the person who wrote out the cheque) has stopped the cheque.

If the cheque results in their client's credit facilities being exceeded, and the Bank is not prepared to advance further monies, the paying Bank has to decide what reason to give for none payment.

- 'Effects Uncleared' indicates that cheques paid in by their customer are still in the process of clearing. Your cheque us likely to be paid on representation. This is annoying to the payee, but not a 'bad' answer.

- 'Refer to drawer, please represent' (RDPR - for short) indicates to the payee of the cheque that whilst the customer does not have the financial resources on the day of presentation the Bank do expect their client to make arrangements to pay in to cover the cheque and therefore suggest you represent the cheque again shortly.

The re-presentation is normally done by the payee's bank under advice to the payee. this is a more worrying answer, but the bank are indicating that they beleive their customer is good for the transaction, just not on the day of presentation.

- 'Refer to Drawer' (RD for short) indicates to the payee that the bank do not expect to have funds made available to meet this payment shortly, or even ever. This is a 'bad' answer, and not used lightly by a bank.

Finally there are a number of further answers available that indicate the business has been closed down/gone into receiveship.

As 'ejones999' says ...
'To be honest if they have done this to you then they have probably done it to others. I think you would be very unlucky if it was done to you in isolation.'
is good advice. Incidentally it's the paying Banker who makes the decision as to whether to pay the cheque or not, not the drawer (in this case the company) of the cheque; the Bank will not take into consideration whether you are a local person, or distant when making their decision.

Putting information into the local press may give you satisfaction as it may damage the reputation of the business further - but IMO your priority is to be paid, not seek revenge. Get payment first, then damage the company's repution would be my recommended suggestion. And even then be very careful - use the wrong words in any newspaper article and you will end up in court for libel. (One further point - local newspapers need to have a story to tell; they often exagerate the story to make it more sensational).

You have tried to contact the accountant with no success. I'd now write to the Company's head office setting out the terms of business underwhich you agreed to deliver the focus group, how you should have been paid, how they have failed to honour their side of the agreement, and that you now demand payment within 14 days - specify the date - or you will take further action. Point out that unless payment is received within the promised timeframe you will add the compensation allowed by law to the debt. Send the letter by recorded delivery.

This approach has proved successful in the past for my business clients.

At the expiry of the 14 days you make the decision as to what action to take.
As 'ejones999' and 'littlevoice' have both implied, consider the possible reward v. your time and additional costs; you may receive nothing in the future. Sometimes you have to put this down to business experience, review your own credit control procedures, increase your margins to allow for these events in the future, and move on.