New Cheque Clearance Rules

PBA

Note that 2-4-6 applies to bank accounts, and it's 2-6-6 savings accounts. So for a cheque paid in to a bank account on a Monday, it will earn interest on Wednesday, be available to withdraw on Friday, and be guaranteed not to bounce on Tuesday next week. For savings it will earn interest on Wednesday, and be available and guaranteed on Tuesday next week (unless your bank agrees better terms, which most do).

Alfie_E

JohalaReewi wrote: »

So what about the scam cheques where you get a cheque overpaying for an item and you bank the cheque and refund the difference. Does this mean after 6 days, the scammer's cheque won't bounce?

It could actually make the problem worse. I can remember a time when the scammers were concentrating on using stolen or counterfeit cheques with the amount in sterling, but drawn on a bank outside the UK. This was because it can add weeks to the time before the fraud is detected. The announcement states the following.

Any customer who is uncertain about clearing timescales for a particular cheque should check with their bank or building society… These changes cover cheques, bankers’ drafts and building society cheques drawn on and paid into a UK current or basic bank account.

I can almost hear the over-payment scammers typing away at their keyboards, carefully crafting gems such as “With new announce cheque rules, you can be sending me this money in your completest confidence.”

Doc_N

Beate wrote: »

Thanks, so in a nutshell the 2-4-6 rule means cheques
earn interest after 2 days
money can be withdrawn after 4 days
and clear after 6 days?

Don't forget - we're talking here of working days. Quite a difference, because you've got to exclude weekends and bank/public holidays.

Milarky

Doc_N wrote: »

Don't forget - we're talking here of working days. Quite a difference, because you've got to exclude weekends and bank/public holidays.

It means you escape the weekend if paying in on a Mon Tue or Wed - instead on only Mon or Tues before - so Wednesday cheques are ok now (except at Easter)

If you bank with Barclays it is possible to cash a cheque from any bank (one you write yourself or one you are given) on any day they open up to £1000. This makes them a '0-4-6' system

With Lloyds you can get interest on the cheque from day 1 but it is still a 0-4-6 system

Many banks were clearing and allowing withdrawal after 3 days. Nationwide, for instance still allows movement (to a higher rate account) after 3 days so they are a '2-3-6' bank

My view remains though that we were conned by the banks self-regulating approach which should never been allowed. The Government made bold statements back in 2000 then gave the job to the OFT - which then asked the banks to set up their own 'Task Force' (long cruise around the S Atlantic eh?) to 'agree' how they could 'help' speed up the system of cheques and electronic payments. Their own industry body agreed (what a surprise) that it was somehow all too expensive to ever speed up the actual physcial clearance of cheques so they would just tweak the system.

And another thing. This 'faster cheque clearing' was meant to come in at the same time as faster electronic payments - since delayed six months. But that's another sham surely. Because this is merely an accounting change it could have been brought in at any time after they announced their two year delay in 2005 (which everyone just accepted) for faster electronic payments. There was no linkage between the two things so faster [non] clearing of cheques was delayed purely because of that. We could have had this two years ago at least.

[Government naivety!!]

raylms

Hmm...there appears to be some FUD in these posts. The site below seems quite clear on the non-bouncing issue.

http://www.chequeandcredit.co.uk/information/-/page/113/

tryfive

raylms wrote: »

Hmm...there appears to be some FUD in these posts. The site below seems quite clear on the non-bouncing issue.

http://www.chequeandcredit.co.uk/information/-/page/113/

It is certainly NOT FUD - read the WWW site yourself!

What are the banks doing to protect customers from fraud? Clearly states that when you pay in a dud cheque: "The funds can’t be reclaimed without your consent unless you’re a knowing party to a fraud"

However, Who pays for cheque fraud losses - retailers, banks or customers? Makes it abundantly clear that you are obliged to pay them back.

In other words, they won't take the money unless you consent to them taking it back - and if you don't give your consent, they have the right to take you to court and force the money out of you!

i.e. Even if 6 days have passed - YOU CAN STILL LOSE THE MONEY.

ISTM that there's no significant difference between the "new" and "old" rules wrt fraud - if someone gives you a fraudulent cheque, whether you know about it or not, you lose out - not the bank, nor the person who wrote the cheque.

It should be pretty obvious why - if the bank didn't do this then you could simply nick a single cheque from someones chequebook, and write an innocent 3rd party a suitably sized cheque for a new <insert high value item here>. As long as chequebook owner doesn't realise one's missing until they get their next statement (quite likely - and up to a month later) then - what? You thought the bank would take the loss? ROTFL!

The only advantage to the person paying in a (subsequently determined fraudulent) cheque now is that (in principle), they can stall for a few weeks until the bank starts legal proceedings

This may help your cash flow, but ultimately you're most certainly NOT protected from getting ripped off.

I may be wrong - but cutting to the facts on the above WWW sites, it seems pretty cut & dried...

olly300

raylms wrote: »

Hmm...there appears to be some FUD in these posts. The site below seems quite clear on the non-bouncing issue.

http://www.chequeandcredit.co.uk/information/-/page/113/

Banks are multi-million pound businesses who set up their own task force to oversee this change and employ lawyers who use dirty tactics.

I suggest you look at the "reclaim your bank and credit card charges" board to see how banks treat customers. I also suggest you pay particular attention to the posts about credit card charges reclaiming as the OFT ruled charges over a certain amount unlawful.

This will clearly make you understand why myself and other posters are stating that the new changes still mean there is no protection for people who pay in fraudenlent cheques.

Trish_Carrington

This is a continuation of a decades-long scam. In Australia and New Zealand over 30 years ago, their inter-bank systems allow for a cheque paid in this morning to be cleared and drawn from within hours - guess why? it's done by computers - they must all link to a central clearing system. You can't tell me that 30 years on, and with our supposed high-tech IT systems ours don't do just the same thing, but like to garner the millions of pounds' interest they can earn by pretending it takes all these days to cart cheques round the country in motor vehicles. Take us all for idiots...

Paul_Varjak

I am not sure how far this 2-4-6 system will go in preventing fraud. According to APACS it was introduced to combat fraud (such as the Nigerian 911 fraud). But, will it?

Bank customers (and bank employees alike) have never understood the difference between cheques being 'cleared' and cheques 'given value'.

I suspect that customers will still think that if 'cleared funds' are available then they are protected from bounced and fraudulent cheques. It would have been much better if the system was 2-4-4, so that cheques are only cleared when they have been 'given value'.

Yes, there is now some certainty over when cheques drawn on UK banks are 'given value', but what APACS fail to mention is that this system will not apply when the payer's bank is outside the UK! Many Nigerian 911 fraudsters use cheques from non-UK banks!

Mikeyorks

Trish_Carrington wrote: »

This is a continuation of a decades-long scam. In Australia and New Zealand over 30 years ago, their inter-bank systems allow for a cheque paid in this morning to be cleared and drawn from within hours - guess why? it's done by computers - they must all link to a central clearing system. You can't tell me that 30 years on, and with our supposed high-tech IT systems ours don't do just the same thing, but like to garner the millions of pounds' interest they can earn by pretending it takes all these days to cart cheques round the country in motor vehicles. Take us all for idiots...

The UK had an 'instant clearance' system - until 1995. It was called Town Clearing. Unfortunately it only operated on cheques above £0.5M in value .. and which were drawn on Banks in the City. It operated on the very sophisticated principle that liveried messengers from those Banks used to walk the cheques between themselves and obtain instant credit :-

Town clearing
A largely manual, low-volume, same-day value paper clearing for high-value cheques and other debit items which operated between branches within a designated area corresponding roughly to the City of London. The Town clearing ceased operation on 24 February 1995.

The quote is from the APACS pages. If :-

You can't tell me that 30 years on, and with our supposed high-tech IT systems ours don't do just the same thing,

......, on the same site, you look at the cheque clearance flow charts - you will find ours do not, and cannot, do the same thing. You can't clear 5M cheques daily on an instant basis when the points of presentation are all over Britain and the primary machinery to convert paper to data ... is in Milton Keynes. And I doubt Australia and NZ achieved that. There is a world of difference between 'drawn' ... and 'cleared'. They may have achieved the former - they certainly did not achieve the latter.