Unequal And Unfair Cheque Clearing Times

ellieoo

Example - Abbey cheque paid to me. I pay into Nationwide and it takes 3 to 5 working days depending on type of account (why the difference). I made a cheque for £100 to my daughter from Nationwide, she paid it into the Abbey very late on Saturday morning. It had cleared out of my acccount on Tuesday morning. Counting only Monday as a working day this was 1 working day to clear from my account. THIS CANNOT BE FAIR. Could someone from MSE look to take this up. IF ALL MY CHEQUES PAID IN HAD CLEARED IN 1 WORKING DAY, I WOULD NEVER HAVE RECEIVED A SINGLE BANK CHARGE. This makes it very difficult to budget, plan direct debits. I am self employed and rely on my customers to pay me promptly - many don,t. THERE MUST BE A LEGAL CHALLENGE ROUTE TO FORCE BANKS THAT CLEARANCE OUT AND CLEARANCE IN THE ACCOUNT IS THE SAME. They win both ways, charging me bank charges when a cheque has not cleared into my account, then quickly taking cheques out and charging me bank charges for exceeding my overdraft as Littlejohn says "you couldn,t make it up" PLEASE PLEASE LETS START FIGHTING THE BANKS FROM ANOTHER ANGLE.

tom188

This has been discussed at great length over the years on this site so I will let you search for most of the other responses.

Briefly the cheque clearance process is detailed here http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=263&a=367

As a cheque can bounce at any time, the banks need a safety net before allowing money to be withdrawn. (Your money may be available after 5 days but can still bounce a month afterwards).

If you dont like the inflexibility and unpredictability of cheques dont use or accept them. Almost any company or individual will accept a credit card payment or bacs payment these days. Cheques are backward looking and on the way out, with less than 3% of transactions these days are made by this method.

MrsPhillips_2

Something else to bear in mind is when you pay for special clearance, it doesn't always mean you can draw on that cheque any quicker. With NatWest, they will take your money to get special clearance but all they do is find out if there are enough funds in the account that the cheque has been drawn on, they don't let you get your money any quicker.

gt94sss2

The rules for the clearing of cheques are changing from November.

From then:

- Cheques paid into an interest bearing account will start to earn interest after no more than two days.

- Customers will also be able to withdraw cash from current accounts a maximum of four days after paying in a cheque.

- Cheques will clear with absolute certainty after six days, unless the bank or other financial institution suspects that fraud is involved. Currently, cheques can be rejected by a bank at any time if fraud comes to light later - possibly many weeks or months later - even if the person paying in the cheque has acted honestly, withdrawn the money and then spent it.

Also, from sometime next year - telephone and on-line transfers between different banks should happen almost immediately (same day and quicker)

Regards
Sunil

natweststaffmember

I think i have explained the exception is ellie's case as well. In house clearing, ie same branch account holder credit and debit and paid in at that branch means overnight clearing.

MarkyMarkD

Balladeer. You are talking rubbish.

The banks DON'T have the technology to clear cheques in one day - the cheque clearing process is fully manual and there's no way to do it in one day.

And if a cheque clears on the third working day, there is NO interest gain for the bank - the person WRITING the cheque doesn't lose the balance from their account until the third working day, which is the same day that the funds are credited to the RECIPIENT'S account.

The only time that banks/building societies benefit from cheque clearance times is where they take longer than the third working day to clear them - which doesn't apply to many banks at all. In cases where they take one extra day - e.g. A&L - it's because they don't start the clearing process until a day later because they send the cheques to a central location before the process starts. They aren't gaining from that extra day - the person writing the cheque is.

Cheques are an outdated, inefficient, way of paying money. Later this year you will be able to transfer money same day to any other UK bank account - so why use a cheque?

RayWolfe

I agree, the OP WANTS things to be different without understanding the system.

MarkyMarkD wrote: »

Cheques are an outdated, inefficient, way of paying money. Later this year you will be able to transfer money same day to any other UK bank account - so why use a cheque?

Not this year now, sometime next year .... we hope!

MarkyMarkD

Oops - sorry Ray. A bit later than I was thinking wishfully!

John_in_the_city

Balladeer,

Give up the cheque, its a dinosaur whose days are numbered. And comparing what happens overseas with the UK is a pointless exercise. Of course technology can accelerate most things, but that is only one part of the equation. In the UK, the physical PAPER is exchanged between the clearing banks. Every day, couriers shuttle bags of cheques by van and plane to the main clearing centres. There is a 3 day clearing cycle which has a regulatory framework around it. Other countries allow for the exchange of images (called truncation) which means the physical paper is not moved. The law does not yet allow that in this country! So there is an antiquated system that is the reality.

The moves by the OFT are around 2-4-6; (interest from day 2, value from day 4 and non-repudiation from day 6) are just minimum standards which (with the exception of day 6) most banks provide now!

The real advance will come with the advent of faster payments next year which will pretty much put the nails in the cheques coffin. Its days are numbered, its acceptance is diminishing daily. Purely from a commercial perspective, Banks will not put in the significant investment that would be required to reach your performance benchmark on a product that is shrinking and has little opportunity for profit.

Balladeer, divert your energies to something else, this is a battle not worth fighting!

elite_2

To drag this off topic, I was really impressed with RBOS (not often I say that!)

Both the company I did the work for and I bank with RBOS, they paid me by check, and when I checked my bank the following day it had cleared :j (I did pay it in to their branch though, if this makes any difference )

RayWolfe

BALLADEER wrote: »

End of story pfffffffffff:mad:

So blue bold makes you right, does it?