Rejected / Returned Bank Draft when cashing into Santander

Ballard

I don’t know whether it’s still possible, but banks used to be able to send a swift MT100 (the forerunner of the MT103) to their correspondent requesting that they issue a draft rather than send the funds electronically. I suspect that it mightn’t be an option any more. 

TheBanker

chrisdorman said:

There was no Sort Code / Account Number but does reference Lloyds bank in the To section.

If there was no sort code or account number, it sounds like this cheque/draft is drawn on a Canadian bank. The Santander cashier should have treated it as an international cheque. However it looks like they've somehow processed it as a UK cheque which has generated the credit to your account. As the UK clearing system cannot process this cheque it has then debited, in the same way a cheque where the payer doesn't have enough money in their account would.

If the branch did process it as a UK cheque, they will have scanned it so the original draft may still be in the branch, or they may send them off to be stored centrally. It is certainly possible that at some point Santander have realised what's happened and may have started the correct process for an international cheque. You might just be waiting for a letter to catch up. On the other hand it may have all been handled by their automated systems in which case you'll get a generic unpaid cheque letter.

Best thing to do, if you've not yet received any letters, is to go back to the branch and ask them to look into what happened and whether they still have, or can retrieve, the original cheque so that it can be processed correctly.

If this is to be a regular transaction, it would be better to receive the funds electronically. A direct bank to bank transfer via SWIFT might be expensive if it's a low value transaction, so you and the payer might need to look at options like Wise. However, international cheques are a pain to deal with, they take ages to 'clear' and there are risks of things going missing/going wrong that don't apply to electronic payments. 

retiredbanker1

TheBanker said:

chrisdorman said:

There was no Sort Code / Account Number but does reference Lloyds bank in the To section.

If there was no sort code or account number, it sounds like this cheque/draft is drawn on a Canadian bank. The Santander cashier should have treated it as an international cheque. However it looks like they've somehow processed it as a UK cheque which has generated the credit to your account. As the UK clearing system cannot process this cheque it has then debited, in the same way a cheque where the payer doesn't have enough money in their account would.

If the branch did process it as a UK cheque, they will have scanned it so the original draft may still be in the branch, or they may send them off to be stored centrally. It is certainly possible that at some point Santander have realised what's happened and may have started the correct process for an international cheque. You might just be waiting for a letter to catch up. On the other hand it may have all been handled by their automated systems in which case you'll get a generic unpaid cheque letter.

Best thing to do, if you've not yet received any letters, is to go back to the branch and ask them to look into what happened and whether they still have, or can retrieve, the original cheque so that it can be processed correctly.

If this is to be a regular transaction, it would be better to receive the funds electronically. A direct bank to bank transfer via SWIFT might be expensive if it's a low value transaction, so you and the payer might need to look at options like Wise. However, international cheques are a pain to deal with, they take ages to 'clear' and there are risks of things going missing/going wrong that don't apply to electronic payments. 

There is a sort code and account number on these cheques but they are not on the bottom of the cheques so a counter reader cannot read them. This is why they should have processed it differently - but for definite it is not an International cheque.

It is a sterling cheque drawn on Lloyds bank for sure.

Miles86

TheBanker said:

chrisdorman said:

There was no Sort Code / Account Number but does reference Lloyds bank in the To section.

If there was no sort code or account number, it sounds like this cheque/draft is drawn on a Canadian bank. The Santander cashier should have treated it as an international cheque. However it looks like they've somehow processed it as a UK cheque which has generated the credit to your account. As the UK clearing system cannot process this cheque it has then debited, in the same way a cheque where the payer doesn't have enough money in their account would.

If the branch did process it as a UK cheque, they will have scanned it so the original draft may still be in the branch, or they may send them off to be stored centrally. It is certainly possible that at some point Santander have realised what's happened and may have started the correct process for an international cheque. You might just be waiting for a letter to catch up. On the other hand it may have all been handled by their automated systems in which case you'll get a generic unpaid cheque letter.

Best thing to do, if you've not yet received any letters, is to go back to the branch and ask them to look into what happened and whether they still have, or can retrieve, the original cheque so that it can be processed correctly.

If this is to be a regular transaction, it would be better to receive the funds electronically. A direct bank to bank transfer via SWIFT might be expensive if it's a low value transaction, so you and the payer might need to look at options like Wise. However, international cheques are a pain to deal with, they take ages to 'clear' and there are risks of things going missing/going wrong that don't apply to electronic payments. 

The OP has confirmed that the draft was addressed to a UK bank (Lloyds) on the face of the cheque, and that it was denominated in GBP, that makes it a UK clearing item and not an international item.

TheBanker

Miles86 said:

TheBanker said:

chrisdorman said:

There was no Sort Code / Account Number but does reference Lloyds bank in the To section.

If there was no sort code or account number, it sounds like this cheque/draft is drawn on a Canadian bank. The Santander cashier should have treated it as an international cheque. However it looks like they've somehow processed it as a UK cheque which has generated the credit to your account. As the UK clearing system cannot process this cheque it has then debited, in the same way a cheque where the payer doesn't have enough money in their account would.

If the branch did process it as a UK cheque, they will have scanned it so the original draft may still be in the branch, or they may send them off to be stored centrally. It is certainly possible that at some point Santander have realised what's happened and may have started the correct process for an international cheque. You might just be waiting for a letter to catch up. On the other hand it may have all been handled by their automated systems in which case you'll get a generic unpaid cheque letter.

Best thing to do, if you've not yet received any letters, is to go back to the branch and ask them to look into what happened and whether they still have, or can retrieve, the original cheque so that it can be processed correctly.

If this is to be a regular transaction, it would be better to receive the funds electronically. A direct bank to bank transfer via SWIFT might be expensive if it's a low value transaction, so you and the payer might need to look at options like Wise. However, international cheques are a pain to deal with, they take ages to 'clear' and there are risks of things going missing/going wrong that don't apply to electronic payments. 

The OP has confirmed that the draft was addressed to a UK bank (Lloyds) on the face of the cheque, and that it was denominated in GBP, that makes it a UK clearing item and not an international item.

They also confirmed it did not have a Sort Code and Account Number, which means it cannot be processed via the Image Clearing System that's used for UK issued cheques.

My advice to go back to the branch still stands as the priority has to be to find out who has the original physical cheque because it needs to be processed correctly. If Santander did try to process it via the Image Clearing System, the original will still be in their posession, either in the branch or having been sent to a central location.

chrisdorman

Sorry for delay in coming back, ended up getting the original bank draft back from Santander, after a bit of chasing up.

I now need to send it off to the International Payments team to sort but want to confirm all before sending off.