Cheque not processed correctly when it was deposited

luv2spend

Hubby wrote cheque from his HSBC current account to pay into a new building society ISA back at the beginning of 2019. The transaction appeared to go through as expected.

He has recently received a letter from HSBC informing him that the cheque was processed by Barclays who credited the building society with the amount but didn't actually present the cheque to HSBC for payment. Therefore his HSBC account was never debited.

Barclays confirmed that this was due to a technical issue they had in 2019-2020 which meant the payment request to the Image Clearing System did not fully complete and thereby HSBC didn't receive instruction to debit his account.

The building society honoured the cheque for the presented amount. 

HSBC are working with Barclays who will attempt an automated process to request the cheque payment from his account later this month, providing he has sufficient funds to cover it.

The questions are:
- cheques are only valid for 6 months and it is now 2 years since it was presented
- can they legally do this as it was Barclays mistake
- what can they do if hubby has insufficient funds to cover the cheque amount

Where does hubby stand on this issue?

davidmcn

luv2spend said:

Where does hubby stand on this issue?

He'll need to find the money from somewhere. Isn't the money still in the building society account or is he genuinely short of cash?

I think the 6 month thing for cheques is at the discretion of the bank, you're nowhere near the normal prescription period (for England and Wales) of 6 years.

Aylesbury_Duck

He owes the money.  If funds are tight then he should ask the bank for an arrangement by which he can pay over a period.

How much are we talking about?

Ganga

He must have noticed that the funds were in his ISA but had not left his current account ,did he think that he had " got away with it " and spend the funds ? as stated he ows the money and will need to come up with it .

68ComebackSpecial

If he hasn't got sufficient funds in his HSBC account then he can withdraw the money from the ISA account.

born_again

luv2spend said:

The questions are:
- cheques are only valid for 6 months and it is now 2 years since it was presented
- can they legally do this as it was Barclays mistake
- what can they do if hubby has insufficient funds to cover the cheque amount

Where does hubby stand on this issue?

The cheque was presented within 6 months, or it would not have gone to the ISA.
Yes HSBC can legally do this. They have 6 years.
If he does not have the funds, and surely must have noticed that he had more in the HSBC acc than expected. Either take it out of the ISA (They pointless now unless you earn more than £1K interest a year) 
Or you will have to hope that HSBC will allow a repayment plan.

David713

luv2spend said:

The questions are:
- cheques are only valid for 6 months and it is now 2 years since it was presented

Cheques don't expire after 6 months, they are valid for as long as the debt is owed.
Most banks and building societies may decline to accept a cheque after 6 months but in law, there is nothing stopping them from accepting one years after it was written.

luv2spend

Thanks everyone for your comments. Fortunately hubby does have the funds.