What is the difference between Cheque Negotiation and Collection?

takkari

Dear All,
Can someone explain what this mean? I got a letter from NatWest and it states:

We have been advised by our US correspondent that the cheque cannot be negotiated and needs to be processed as collection.
Unfortunately we have only received a copy of the cheque not the original. However we will arrange for the copy to be presented on a collection basis.
Once funds have been recieved from the collection we will credit your account.

I presented the original cheque a month ago. What all these statement mean? I dont understand. Can someone please clear to me what I need to do now?
THANKS.

geordie_joe

I think the difference is with a negotiated cheque you get the funds before the cheque has cleared. This means the money goes into your account but could be taken out again if the cheque bounces or is stopped.

With collection you don't get the funds until the cheque has cleared.

takkari

geordie_joe wrote: »

I think the difference is with a negotiated cheque you get the funds before the cheque has cleared. This means the money goes into your account but could be taken out again if the cheque bounces or is stopped.

With collection you don't get the funds until the cheque has cleared.

But I deposited the cheque 5 weeks ago? How much more time it will take?

geordie_joe

takkari wrote: »

But I deposited the cheque 5 weeks ago? How much more time it will take?

I don't know, HSBC just says it can take several weeks.

jorichste

I'm not sure if its the same but i put a cheque for aussie dollars in my natwest account this week and they said it would take up to 6 weeks to clear

jonesMUFCforever

takkari wrote: »

But I deposited the cheque 5 weeks ago? How much more time it will take?

It depends on how long the US bank takes to send the money to your bank (usually via an agent bank). This adds to your costs unfortunately.

I would be slightly worried about the letter saying that they only have a copy of the cheque - ask them what has happened to the original?
This will delay the credit to your account as the US bank now have to specifically ask their customer whether it is ok to pay this cheque on a copy basis only.
If they say no or don't reply then you could be waiting a long time. Before you badger your bank too much though, ask about charges; as banks will chase this up for you from time to time but after the first telex they tend to charge around £5 or so for every subsequent chase.