Stolen Cheque - advice needed?

p4tti

Before moving on it does state


"Stopped Cheques resulting from theft
or loss of blank cheques "


Nothing ambiguous in my mind.

mgdavid

p4tti wrote: »

Before moving on it does state

"Stopped Cheques resulting from theft
or loss of blank cheques "

Nothing ambiguous in my mind.

not ambiguous but very clumsy use of the language; xylophone's version is more elegant and much improved.

SnowTiger

jazzy wrote: »

My daughter had her purse stolen yesterday, one of the contents was a cheque made out to her from myself for the value of £40.
I called at my HSBC bank today to see if I could cancel this cheque, unfortunately HSBC have a charge of £12 to cancel cheques, even stolen cheques (unlike other banks). HSBC inform me that it is very unlikely that someone else could cash the cheque. Is this true? or should I pay the cancellation fee?

All standard cheques offered by banks are 'crossed', meaning they can only be paid in to an account of the person named on it.

http://www.adviceguide.org.uk/wales/debt_w/debt_banking_e/cheques.htm:

If a cheque is crossed and marked 'account payee' or 'account payee only', it must be paid into the account of the person it's made out to. However, some companies offer cheque cashing facilities and they will cash a cheque marked 'account payee only'. They will charge you for this. If a cheque is uncrossed, or 'open', it doesn't have to be paid into an account. In this case, the payee can simply take the cheque to the bank and get the cash.

I think the companies that cash cheques technically open a bank account in the payees name and pay it in to that. Presumably anyone cashing a cheque this way would have to provide proof of their identity and address. I don't know how stringent these cheque cashing places are.

I guess your daughter needs to weigh up the definite loss of £12 against the potential loss of £40.

I've had a look at the websites of a few companies that offer cheque cashing services. They appear to want photo ID and proof of signature.

I think I would risk the £40 loss by not reporting the cheque lost.

jazzy

SnowTiger wrote: »

I think the companies that cash cheques technically open a bank account in the payees name and pay it in to that.

I've had a look at the websites of a few companies that offer cheque cashing services. They appear to want photo ID and proof of signature.

I would have thought that opening a bank account with false information would be illegal. If not it should be.

To make matters worse her photo driving licence was also in the stolen purse, also her credit cards which have now all been stopped.

BMN

SnowTiger wrote: »

I think the companies that cash cheques technically open a bank account in the payees name and pay it in to that.

They pay them into an account in their own company name but they will have a specific arrangement with the bank that allows them to pay in cheques from 3rd parties. This is still compliant with the law.

Armorica

BMN wrote: »

They pay them into an account in their own company name but they will have a specific arrangement with the bank that allows them to pay in cheques from 3rd parties. This is still compliant with the law.

Well, it's not. But it's a business risk that is taken and mitigated.

OP - send a message to HSBC via the secure messaging thing saying that you understand cancelling a cheque would cost £12 and thanking them for the advice that it is a low risk that anyone else can deposit/cash the cheque. Importantly, add that if they do attempt to claim it from your account you would expect them to counter-claim from the collecting/receiving bank for conversion.

http://www.financial-ombudsman.org.uk/publications/technical_notes/disputed-transactions.htm#5 the section headed 'a cheque that was meant for the consumer, but was stolen by a third party ("cheque conversion")'

jjlandlord

A good practice is also to endorse cheques immediately when receiving them.

mgdavid wrote: »

not ambiguous but very clumsy use of the language; xylophone's version is more elegant and much improved.

Except that the bank cannot stop a blank cheque.
The bank can only stop stop cheques when they are presented for payment, i.e. when they are filled, which is exactly what the HSBC's wording states.

Banks do have some experience with cheques...

Armorica wrote: »

Importantly, add that if they do attempt to claim it from your account you would expect them to counter-claim from the collecting/receiving bank for conversion.

http://www.financial-ombudsman.org.uk/publications/technical_notes/disputed-transactions.htm#5 the section headed 'a cheque that was meant for the consumer, but was stolen by a third party ("cheque conversion")'

That would be for the daughter to do, IMHO.
Indeed, if the cheque is converted then she is the losing party. Technically OP has paid the money to her when he handed her the cheque, after that it's her responsibility.

Enterprise_1701C

I had a cheque go missing in the post once, admittedly years ago. Asked my bank to put a stop on it, and they told me I would only be charged if the cheque was actually presented for payment.

Don't know if this actually applies here.