Bank and Cheque problem

Wynn2022

I went to pay a cheque in at my bank and was advised to use the automatic paying in machine which I did. This was a printed cheque for £6000 from my Building Society withdrawn that day. Two days later I received a letter informing me that the cheque was illegible with a photo copy of the cheque, this letter was purported to be from my branch manager but no name and a short squiggle for a signature. I could read the cheque even though it was a photo copy. I phoned up as advised if I had a query, the person at the call centre looked up the matter and proceeded to read all the details on the cheque and could not understand the problem, he then put me on hold while he queried the matter. He informed me that the Building Society’s Bank stated the cheque was not legible and gave me their telephone number, this number was only for their customers, so useless. I then phoned my bank again and spoke to someone else who informed me that their machine had forwarded an illegible copy of the cheque. She seemed unable to understand that there was a valid cheque in their possession that they could have retrieve and sent a legible copy. She would not help and it was my problem to sort out. In the past banks used to have to retain cheques etc. for many years and used to have store rooms full of such material.

What happens to cheques now when they have been paid in?

Why have banks got deposit machines that do not recognize a problem and immediately return items requiring them to be taken to the counter or an assistant?

Should the bank have done more to assist me as it was their defective machine that was unable to clearly read a printed cheque?

Was the letter from the branch manager or is everything automated with no human input only people at call centers that have to apologies for the machines but unable to do anything to help?

WillPS

You have cause for complaint, so complain. Calculate how much time this has taken you and put a value on that time - at the very least minimum wage.

In the meantime the Building Society should be able to reissue the cheque if you go back to the branch and explain the problem.

eskbanker

Is the building society too small to facilitate a direct electronic transfer to your bank rather than having to use pieces of paper?

Ballard

I would have thought that your bank could attempt to represent the cheque and see if they have a better response the second time around. I would guess that they scanned the cheque into the clearing rather than sent the physical cheque and maybe the scan wasn't up to much. I'd say that it's for your bank to sort out regardless.

I don't know how long they need to keep cheques for but being as they advise customers to destroy cheques once they've cleared when paying in by app I suspect that they follow similar rules.

Neil49

As far as I am aware, any cheques paid in at a bank branch are retained at that branch. I suggest you go back there and query the entire process involved. It's for them to resolve. 

Wynn2022

I have complained to the bank through their web procedures and someone phoned me. I was informed that the machine produced an unacceptable image that was transmitted to the Building Society’s bank, and from what she said I understood there had been other similar cases. She would not accept that due to their defective machine I was being inconvenienced, yet she apologies for the inconvenience. If they were not at fault, what was she apologising for? She stated that the cheque had been destroyed. She said that she was upholding my complaint whatever that means and asked if I wanted to escalate the complaint which I said yes. I am awaiting developments.

The Building Society have been helpful, they could not understand what the issue was and needed time to look into the matter which has taken a few days. They did offer electronic transfer but as my bank was next door, I was happy with a cheque. I believe in keeping the cheque in use and make payments at the counter, use it or lose it, minimize disclosing banking details, stop machines taking over. Yes, I am a bit of a dinosaur. The Building Society have cancelled the cheque, they did offer to issue another cheque and take it next door and pay it in for me, this offer I declined.

At no stage has the bank asked if the inconvenience would cause me a financial issue or offered any assistance to cover the problem cheque. I do not transfer such sums of money unless there is a specific reason.

Does anyone know the exact banking regulations regarding cheque retention?

ForumUser7

Wynn2022 said:

I have complained to the bank through their web procedures and someone phoned me. I was informed that the machine produced an unacceptable image that was transmitted to the Building Society’s bank, and from what she said I understood there had been other similar cases. She would not accept that due to their defective machine I was being inconvenienced, yet she apologies for the inconvenience. If they were not at fault, what was she apologising for? She stated that the cheque had been destroyed. She said that she was upholding my complaint whatever that means and asked if I wanted to escalate the complaint which I said yes. I am awaiting developments.

The Building Society have been helpful, they could not understand what the issue was and needed time to look into the matter which has taken a few days. They did offer electronic transfer but as my bank was next door, I was happy with a cheque. I believe in keeping the cheque in use and make payments at the counter, use it or lose it, minimize disclosing banking details, stop machines taking over. Yes, I am a bit of a dinosaur. The Building Society have cancelled the cheque, they did offer to issue another cheque and take it next door and pay it in for me, this offer I declined.

At no stage has the bank asked if the inconvenience would cause me a financial issue or offered any assistance to cover the problem cheque. I do not transfer such sums of money unless there is a specific reason.

Does anyone know the exact banking regulations regarding cheque retention?

If you have been financially inconvenienced or been caused financial hardship due to the error, you’ll need to specifically tell your bank this during the complaint. They can then consider this during the investigation.

Usually, the general advice when a cheque fails to clear is to get a new one from the issuer, and represent it to the organisation you wish to pay it into.

I don’t know of any period required to retain cheques, but I would think that banks could destroy them as soon as they were entered into the clearing system purely because if they had to retain them it would be extra admin and take up storage space. Also, they must get several cheques per day and usually they clear fine so it may not be deemed as a proportionate response to the risk.

It is annoying when they don’t though, and I hope you’re able to sort this with both organisations involved.

[Deleted User]

For your own sanity, I would suggest you move on -  get a new Building Society cheque, complain to mitigate some of your inconvenience from the bank then consider your banking arrangements going forward.

I had a very bad experience with a bank. I got an apology and compensation but still opted to switch the current to a new provider and close their credit card down. You could do similar or opt to give them another chance.  

ForumUser7

Wynn2022 said:

Forumuser7 you appear to be missing the point.

You got a cheque from your building society. You paid the cheque into a machine at your bank. You had a letter from your bank stating the cheque was illegible, and you think the machine was defective. You contacted the bank and were provided with poor service so complained. From what you've said, your complaint appears to still be under investigation, unless the bank has issued you with a 'Final Response'. If I've misunderstood this, I apologise and please let me know which part is wrong so I can try to help with that.

"The bank has a defective machine and has created a problem for me and is unwilling to do anything to help."

Have you had this problem with the machine before, or is this the first time? If it is a repeated issue, definitely make the branch aware in your complaint. If every customer using it had their cheques fail, I would be surprised if they didn't have systems that noticed this, but maybe they need someone to take a look at the machine if it is happening often. If this is the first time it has happened to you, it is unfortunate but these machines don't always work. There are sometimes threads on here about ATMs that debit the account, without giving the cash for example.

"Why do you want us to roll over and accept it and submit to the rule of the machine? Are you human, your comments are more like a bank AI excuse machine?"

If you wish to pursue the matter with the bank you can do this, and I don't mind if you 'submit to the rule of the machine' or not. I just think that you'd save time by getting a reissued cheque from the building society (if you still wouldn't like to use electronic transfer), and then complain to the bank in question given you were unhappy with the service (which does seem poor). If they have an option to do this in writing, this may be a good approach because then it can all be laid out clearly and you can ensure they have all the information you want them to have. Make sure you mention your points about time spent, why didn't the machine reject the cheque, and the fact that you will have to travel again to your branch.

As @[Deleted User] has suggested, you could also re-consider who you bank with. There are some banks that'll pay you to switch to them if you fulfil certain criteria - https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/

I am a human and I've taken time out of my day to try and help you.

"Why does the bank not have procedures in place to deal with such matters. If I put my bank card in the wrong way the machine rejects it, so why if the machine cannot read a cheque, it does not reject it and get a human being to review the matter?"

Did the machine display a copy of the cheque on the screen so you could confirm it was copied properly? And was this copy legible? If not, the machine likely took a copy of the cheque, but is not programmed to check it is legible for some reason. Hopefully as banks work on these machines they will be able to reject them and get a human to review it if the copy is no good. That said, you mentioned there was a copy on the letter you had which was legible, so perhaps there was an error during the transmission between the banks.

"This was a printed cheque from a sound financial institution which would only issue the cheque if there were funds in my Building Society account."

Given the bank confirmed it was because the image was illegible, I don't think the level of funds in the building society account were a problem.

"I spend several hours contacting the Bank and Building Society to resolve the matter as it made no sense. I also had a worry 5 minutes and thought it may be a scam, that somehow hackers had obtained a copy of the cheque. When I contacted the bank, they required numerous details about my account to confirm my identity which I gave them, this would have been exactly what a hacker required. I went onto the bank website and went to contact us to check this matter, no phone number, I eventually found the number on my bank card which was the same number. I now have to go into town on a specific journey to get another cheque and pay it into my bank, more inconvenience. The local bank branch has been closed."

Make sure you tell the complaints team how much time you spent and ask for them to record this on the case, and if your phone has a call history take screen shots of the call durations. They will be able to consider this when resolving your complaint (if they haven't already issued a final response).

The banks require this information to avoid fraudsters accessing accounts. I do see what you mean though, if I ever get a call purporting to be from a bank I do not give details and rather I call back on a number I know belongs to them.

"Yes, I am aware that machines speed up the process and reduce costs, but surely it would be better if they spent that money on helping their customers with good human staff to resolve such matters rather than their hours of pointless adverts, sponsorship, corporate entertainment and vast profits?"

I agree. Customer service at banks has been very poor as of late, and it does need to improve. Unfortunately banks prefer to return profit to their shareholders rather than investing in service standards. Your building society is owned by the members, and therefore they will likely be investing more in service.

"I was fortunate that this matter has been a minor inconvenience but if I had desperately needed those funds to be in place it could have been very serious. In the future it may be different for me, you and everyone else if the machines continue to fail."

I agree that it is important these machines don't fail. I actually don't like using them anyway and I always go to a counter, or use mobile banking, instead.

I don't know which bank you have your account with but lots have mobile app cheque deposit features. LBG for example allows up to £5,000 individual cheque value, but only one per day. These give you a preview of the cheque you have photographed so you can ensure all is well before submitting it. This would also mean you wouldn't need to use the machine in branch. I recognise your cheque is for £6,000 so this wouldn't work on this occasion, but if you have a cheque of less than or equal to £5,000 in the future, this may be helpful.

Finally, once you have been issued a final response by the bank, if you find it unsatisfactory you can complain to the financial ombudsman which is a body that'll independently review your complaint and can order the bank to pay compensation if it sees fit. This guide shows how much they may suggest ~ https://www.financial-ombudsman.org.uk/consumers/expect/compensation-for-distress-or-inconvenience

retiredbanker1

OP the bank has lied to you - when the scanning of cheques became the norm and replaced the clearing cycle - all cheques remain either at the branch paid or at a central point for all branches of that bank.
To begin with we were only holding the cheques for something like 10 days but there were so many problems with the whole system that we I retired we were holding cheques for at least 12 months.
The cheque would not have been destroyed - unless of course it was mangled in the machine - but if that happened you would not have a photocopy of it.

Wynn2022

Thank you all for your comments:

Fredtrump – yes, it is probably better to move on but this felt and still feels like a ridiculous situation and worrying.

Forum User 7 – Apologies for my comment regarding AI but these days who knows. Thank you for taking the time for providing such a detailed response. Yes the cheque appeared on the screen and appeared correct, so does the photocopy they sent me. I have used the machines many times with only one issue, minor difference between amount text and numbers so my fault for not checking, not the machine.

retiredbanker1 – Interesting, I shall have to see what the Bank has to say, I have made an official complaint and they are presently processing it.