Gaurenteed Cheques

pinkie-mermaid123

Last week a friend asked me to cash a cheque for him, which was gaurenteed, with a valid card. All the details were put on the cheque, the account is active. I have done this before and never had any problems.
However, i have recieved the cheque back today saying they wont cash it as there were insufficent funds in the account.

Don't the banks have to honour a cheque gaunertee card??

cifpower

Not if they don't want to. Your friend's account may be seriously overdrawn and the bank may have withdrawn his use of the CG card and cheques.

lynxptc

I thought that a cheque which is guaranteed by a cheque guarantee card MUST be honored by the bank hence the name "cheque guarantee".

Belnahua

I seem to remember reading somewhere, that if the bank has withdrawn the use of the card, and the customer still carries on using it, the bank can and will refuse to honour the cheques. And the customer is committing an offence by writing a cheque knowing it cannot be cashed. IIRC.

~Beanie~

Did you write the cheque card number on the back yourself? They can wriggle out of paying it if the drawer wrote their own number on.

lynxptc

The number may have been written down incorrectly, or what has most likely happened is the bank cashier has made a mistake and not seen that the cheque was guaranteed with a card.

I've confirmed online at the APACS site that a guaranteed cheque cannot be stopped or cancelled for any reason and must be honored by the bank.

I would contact the bank again and ask them what is going on.

smithja

It is pretty complicated and yes the banks abuse it the same as the customers do.

First of all you said you accepted it for cash and I dont know if a person can "cash" a guaranteed cheque in the same way as a bank can, either way it must be put in to the bank within 3 days of its day of issue were it is for cash. But presuming he/she wrote it out in your name and it does not say on it what it is for then the bank has no way of knowing.

You can accept a personal cheque guaranteed by a valid cheque card and as long as you followed all of the rules to the letter the bank MUST pay the cheque, however, they will try it on when they dont want to i.e. the customer is overdrawn and they dont think they will get the money back; they will bounce it.

In order to guarantee it properly you need to have it signed in front of you, and this is important it must have been you that wrote the card number on the reverse of the cheque. You must also have checked the card was within it's valid date and were it has a sort code it matches the the one on the cheque.

If you followed the rules correctly then I would take a photocopy of both sides of the cheque and post them to the banks head office. Tell the bank the rules were followed correctly and that you will sue the bank for the value of the cheque and your costs if it is not honoured and that you will re-deposit the cheque in 28 days.

You can find details of the cheque guarantee scheme here (it does not matter if the bank has stopped the card, recalled it, or whatever, as long as you have a card and a cheque in front of you and follow these rules you are guaranteed your money, it is what it is for):

http://www.apacs.org.uk/payment_options/documents/cheque_card.pdf

I think there maybe another technicallity they can reject the cheque on and it is not in the rules, that is if the cardholders name is shown on the card as "Mr J Jones" but he signed their name "John Jones" this used to be able to make a difference as could the bank issuing the card and cheque in a different format i.e the card has "Mr J Jones" and the cheques "Mr John Jones". As I recall technically you are supposed to sign the cheque as your name appears on it.

However, as I said it is not in the rules and these are the official APACS ones hopefully they did away with that years ago, the bank has to stick to them whether they like it or not.

Jvic28

Obviously though, you did check that the cheque value was under the amount on the cheque guarantee card. ie. you didn't bank a cheque for £150 when the guarantee card is for £100.

x

pinkie-mermaid123

Thankyou for all the replys.

In order to guarantee it properly you need to have it signed in front of you, and this is important it must have been you that wrote the card number on the reverse of the cheque. You must also have checked the card was within it's valid date and were it has a sort code it matches the the one on the cheque.

All this was done, and all details were corect. The cheque was for £100, which was the limit on the card, so that is also fine.

I have been checking and apparently, there have been another couple which have been returned aswell, so i'm assuming he is overdrawn. But if what you say is right, it does just seem as though the bank are just trying to get out of paying.

smithja

Yep, it does seem that way.

It happened to me once and I re-deposited the cheque twice and it bounced again and again so I wrote to the head office of the bank on which the cheque was issued telling them they are bound by the guarantee rules to pay the cheque and if they did not pay it I would sue them for breach of contract. It worked.

If you bank with the same bank that the cheque is issued by I would speak to someone in your branch about it. But don't let them try and put you off as they will try all sort of tatics not to pay it, telling you the scheme is only for retailers, we dont beleive you wrote the number on the back, etc. etc.

Good luck

Jvic28

pinkie-mermaid123 wrote: »

All this was done, and all details were corect. The cheque was for £100, which was the limit on the card, so that is also fine.

Ok, sorry for asking a stupid question but sometimes the silliest question is the best one to ask. Sorry I can't help further.

x