Recalled Cheque

hadenoughofdebt

My husband received his August pay cheque dated 28th August and banked it that day - Nationwide Flexaccount. The cheque showed as cleared funds in our account on Friday and we paid all of our monthly commitments. On Thursday, the company who had paid that cheque to us terminated my husband's self-employed contract and on Monday of this week - 6 days after it had been paid in and one working day after it had cleared, it was recalled.

We are now significantly overdrawn and, to say the least, hopping mad! Nationwide said that cheques could be recalled up to six years after they have cleared. Surely this can't be true!

hadenoughofdebt

Any bankers out there - please help!

Badger_Lady

This is shocking, doesn't seem right, otherwise we'd all be doing it...

All I can find is a bit of regulation that says "A cheque can be stopped any time up until it is presented, and cannot be stopped after it is presented", but I can't find anything about recalling cheques.

Sorry!

hadenoughofdebt

That's how I feel! Surely once a cheque has cleared, it's cleared and the money is yours!

Thanks for looking that up for me.

YorkshireBoy

I've often heard the phrase "cheques never clear", but always associated this with fraud issues.

Some reading for you:

What Nationwide say about clearing cheques...

Although the Society will allow members to draw against cheques paid into their accounts after a few days (as shown), this does not always mean that the cheque has cleared. Cheques later returned unpaid will be debited from the account.

A diagram of the cheque clearing cycle from APACS...

http://www.apacs.org.uk/payment_options/documents/Cheque_Clearing_Cycle_diagram.pdf

...note the 'brown' boxes bottom left of the diagram (which seems to indicate their is a little leeway/trust between the banks).

Again, from APACS...

Can I stop a cheque?

You can request your bank to stop payment of a cheque before it makes its decision whether or not to pay it. If payment of the cheque was guaranteed by a cheque guarantee card, you cannot subsequently ask your bank to stop payment.

However, there are two possiblilities that spring to mind...

1. There is a contractual reason for the employer (subsequently) cancelling the pay cheque, or

2. The employer is having financial difficulties and the bank themselves have stopped the cheque.

dunstonh

Cheques can be cancelled upto 6 years later but they cannot be stopped by the issuer if they have passed the morning after it hits their account unless it is fraud.

You paid it in on the 28th. The cheque would then hit the employers bank account on the 30th August. The bank have a stop on that cheque (one assumes that it bounced payment cancelled by drawer - more commonly known as a stop on the cheque). That cheque is then posted back on the 31st to the Nationwide. 31st if Friday so it gets to Nationwide on Monday who then will debit the account monday and write to you which you get tuesday. If post takes 2-3 days then that could delay it to tuesday or today.

So the nationwide have acted correctly and the payers bank have acted correctly on instruction from their account holder.

No rule breach appears to have occured here.