Written by John Kruse, one of the leading experts on Bailiff Law, this consumer friendly guide is essential reading for anyone who comes into contact with a bailiff.
The book is easy to understand and clearly explains the rights
a bailiff has, and also what they cannot do when collecting debts and repossessing goods etc.
Question: How do we get the banks to scrap their ancient 3 day cheque clearing system?
They already have BACS (Banks Automated Clearing System) Most credit card transactions are real time and are declined if there are insufficent funds, so why can't this be done for cheques?
I really can't see how this can be difficult. I know the real reason is that the banks will lose their £30M annual profit from earning interest that this 3 day void creates, but we shouldn't have to tolerate it in this day and age. The Banks have had it their way for so long I feel that it's time that they dragged themselves into the 21st century and started giving real value and service to their customers. I understand that the OFT have been investigating this, but it really shouldn't take that long seeing as the banks already have a system in place.
All they need to do is give all their cashiers access to the BACS system on the counter. When someone presents a cheque, they type in the cheque details on the system or use an OCR reader to read the characters on the bottom of the cheque and verify the amount with the customer. If the BACS system verify's that there are sufficient funds, then the transaction is processed. If there insufficient funds, the cashier hands back the cheque to the customer to take up with the issuer. No transaction takes place, no penalty charges necessary. The customer could then re-present the cheque later.
The only problem I can see is with security and fraud. However, I know for a fact that the current cheque clearing system doesn't have ANY security in place, as my wife has written hundreds of cheques from my personal account and her attempt at my signature isn't even close, so that doesn't wash with me! I know HSBC keep my signature on the screen and they use it for security purposes for when I cash cheques, so the other alternative is to present the cheque at the bank of the originator, who can check on their systems that the signature is genuine and set the BACS transfer from their bank to yours.
The other way would be to abolish cheques completely and use internet / telephone banking to setup BACS transfers. The system and security is already in place. It already works for my HSBC account real-time for transfers to other HSBC accounts. Even if it took a few hours or maybe next day, it would still be far better that the pathetic excuse for an automated system that they have at the moment.
I feel a letter the the customer services manager of HSBC coming on!
Here here! I too know of someone who signs on behalf of their spouse and no-one bats an eyelid. This female also uses a credit card at the supermarket with a man's name on it and simply enters the PIN with no trouble at all. (This is clearly illegal so I am not admitting anything or making a confession)
I have had many an argument with bank employees over this issue.
You are wrong, its not a sham, they have a protocol agreed between the banks to protect the consumer. Sorry i cant find the button that turns on the sarcastic font!!!
And its not three days its 3 working days which can turn out to be a lot longer than three working days.
I believe that some cases its 5 days or more.
Another big swindle
Glenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
I agree to a degree in what you are saying but I would hate to work in the sort of system you propose because it would be extremely difficult.
How long would it take to process a businees customer with 100 cheques, not humanly possible to serve that many customers in one day.
The fraud aspect is right though because banks do not check every single signature only on cheques above a specific amount. hint it is 5 figures
I even know someone who signed an authority form on behalf of a spouse. Clearly wrong but necessary as he was away at the time. (again, I am not saying this was me) I can't beleive it was accepted.
Lisa x
NatWest: MCOL 16/08/2006 AQ's - copy received from Cobbets 07/10/06 offer received: 14/10/06 FULL AMOUNT RECEIVED TODAY (1st Nov)
Citicards: LBA sent 05/10/06
Baclaycard: MCOL 07/09/06 Defence filed on deadline
Claims settled in full are:
Sainsburys Bank
Mint (RBOS)
Style store card (RBOS)
Natwest Mastercard
Marbles (HFC)
HSBC
MBNA
I agree to a degree in what you are saying but I would hate to work in the sort of system you propose because it would be extremely difficult.
How long would it take to process a businees customer with 100 cheques, not humanly possible to serve that many customers in one day.
I am not sure i get what your saying here?
currently the banks allow us to use a cheque system which whihc inherently introduces a delay into the processing of those cheques.
Historically somoene had to take the cheques by hand to a clearing bank where all the banks swapped respective cheques to clear them i think thats how it used to work.
Now the banks dont have to actually do that, they could easily implement an electronic system to perform the same function far more cost effectively for both parties.
Bar codes on the back of the cheque, electronic stripes, coupled with minimal inoput from the operative would reduce the banks costs as much as they would speed the turnaround time for the customer.
JMHO
Glenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
If you have seen the diagram from APACS it shows more or less the process in place. I am still not with you on the cheques bit. I am confused. Does the barcode on each cheque relate to an indivdual bank or account? I'm getting confused
I was making the point that if there was the desire it would be easy to identify individual cheques using a barcode or similar.
The point is that most of the input would could be automated very easily with basically a single entry ie the amount from the cashier.
What I dont understand is that the diagram explains an antiquated system where bank rely on the movement on a bit of paper which effectively intriduces a delay into proceedings.
Yet if you use a piece of plastic the protocl is compeltepy different and from a customers viewpoint there is no reason why this should be so.
From a security viewpoint there doesnt seem to be any advantage bearing in mind the anecdotal evidence about the signatures, etc.
All just my opinion but it appears this protocol serves the banks a lot more than it serves the customers.
JMHO
GLenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
With Halifax Card Cash CURRENT account If I put a cheque in on Friday 1st, I have to wait until Tuesday 12th to withdraw, ABSOLUTE BO***KS.
I now have a First reserve SAVINGS account with Natwest, can get the money on Thursday 7th instead.
The cheque system is a farce, they need to automate it. I did however use to benefit when I worked in a supermarket since they only banked them ONCE a week and so with the clearing time as well, I could get shopping upto two weeks before payday.
It is not quite so simple as you may think to effect the changes.
The first requirement would be a change in the Bills of Exchange Act. At the moment, much of the responsibility for paying a cheque lies with the bank on which
the cheque is drawn. Now you are asking the accepting bank to shoulder that
burden as well as the legal requirements it already has to perform as the accepting
bank. As I said, the Bills of Exchange Act stipulates the relevant role for both the
accepting and paying bank. So that would entail rewriting several of the Acts
clauses.
Some branches have customers who pay in hundreds of cheques per day. The kind of change you envisage would mean that each cheque would have to be physically
scanned to ensure that any endorsements are correct; that each cheque is
correctly dated: that each cheque has the payees name filled in; that the words and figures agree; that the cheque has been signed and the signature agrees with
the bank specimen; then cheque that there is sufficient funds to pay the cheque,
and if not, whether to pay the cheque anyway, to avoid embarassing the customer;
that there is not a stop on the cheque. Oh yes, and you are expecting that each
bank will divulge that kind of information to every other bank and branch in the country. Apart from probable infringements of the Data Protection Act, no bank
would contemplate providing other banks with that kind of information, nor would
they want their busiest branches to be subject to the extra responsibility of
being both the paying and accepting branch. There would also be a much greater
chance of fraudulent transactions since each bank is not au fait with other banks'
different types of cheque [so less likely to spot forgeries, but still be liable for
making the error of paying out the forgery, as well as paying out the forgery in the first place.] It would also give criminals a licence to print money.
Some of you have already alluded to members of the same family forging signatures. At the moment that is usually dealt in house by the respective branch
when uncovered and steps taken to prevent further problems without involving
the authorities. I can't see that happening when other banks are involved. They
would want to cover their backs, since as the paying bank they are liable.
I am sure that Natwest staffmember could add many other problems that would
arise with your proposed system. I am not saying it can't be done, but it would not
be simple.
I do agree and that was one of the points I was making. If you want (further) queueing time with this sort of individual scanning then great but it is not a good idea. I do agree that the clearing cycle should be quicker but....
But then again the banks customers would benifit long term because they would not have to wait so long for their moeny due to cheque clearance process.
Re the time taken to dela with cheques i think you have it wrong, unless changes to the cheque processing systems radically increased cheque usage, then the time taken for the cheques to be scanned would be boradly speaking the same as it is now with the added benift that it would allow stolen and fraudulent cheques to be spotted at pay in.
Business paying in hundreds of cheques dont stand in line now they woulndt under an electronic system.
With the money the bank makes it could afford another machine to scan cheques, basically it would reduyce processing time at the receiving bank.
JMHO
Glenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
How many cheques on average do you think goes through one medium sized branch during one day? Even if you get an additional machine, where do you put it? I agree with the idea in principle but the practicalities as it stands does not add up. If a customer has 100 cheques, it takes me roughly 1 or 2 minutes to check that, words and figures match, payee details, date and that it is signed. The system we are talking about would add additional time to it and therefore increase times people have to queue. As was also stated it would require a change to the Bills of Exchange Act which is dealt with through Parliament.
It is almost impossible for a cashier to spot a cheque not drawn in accordance with the mandate.
I agree that the 3 days is crazy, the reason that I got on to this site was that my bank paid a cheque that was written for £587 for £3587. When I complained they told me that they only check the numbers and not the written amount, they even paid this despite taking my account £2500 over my overdraught limit (but they kindly did not charge me). I am amazed that teh automated clearing system only reads the numbers this is surely not safe!
First Direct - Settled in full
Lloyds TSB - AQ completed Central London CC
RBS - Settled in full
Morgan Stanley - Settled in full
Capital One - Settled in full ;-)
Citi Cards - Transfered to Mercantile Court 19/10/06
Nationwide - Settled in full 8)
Capital One Acct 2 - Prelim letter
Chrisgabel-the automated system does read all the details but mistakes do happen like you stated above and banks would have to refund in that particular set of curcumstances. Your bank were talking rubbish to you.
I think that you are misunderstanding me, I am thinking of a fundemental change.
I agree its will be difficult, there is little in life thats worthwhile and isnt difficult.
I think the problem is that the bank has the capability to process electronic payments almost instantly, but is still using a systm which essentailly relies on exchaning bits of paper by hand.
The only justification for this from a customers viewpoint is the ability of the bank to hold money and gain benifit from it for an extended time.
Legislation is not a tablet of stone, ourlegislators psend their whole lives thinking up new acts, chaning and repealingold acts.
It does not seem to be beytond the realms of possibility that the banks could not revise this ancient system and signficantly reduce the time taken for a cheqeu to clear.
Your objections have some validity only in as much as they are problems to be resolved, not reasons not to revise the system.
JMHO
Glenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
I know electronic payments will change by the end of next year, again APACS fan club member here. I'm also aware that electronic payments between two accounts at the same branch are quicker as well. In specific relation to cheques the system of scanning at branch level is impractical, physically. Can I ask you expand how the system of cheques could be quickened at branch level, the point in which they are deposited, so that cheques can be processed quicker.
It seems to me that the step that is used as the excuse for the delay is the exhnage of cheques between different banks.
If the cheque has a readable strip on it, when the cashier receives a cheque its enter into a reader, the only entry the cashier would have to make it to confirm the value.
The reaqdable strip contains all the account data for the account holder. I guess in theory there is n o reason why the cheques couldnt be vliadated in real time to confrim that the cheque is not a fake, isnt stolen and that the account has money it it to cover the cheque.
I realise that any addiotnal time at the cashiers window may not be helpful and I dont really have any concern about where the actual 'clearing' is done.
It just seems to me that there is no real reson why it shold take several daysw and require peopleto transfer the actual cheque from one bank to another.
I realise legislation would need to be changewd but this shouldnt be a bar to improving things if the only reason that currently cheques go thought this process is becase of legislation.
I suspect that banks keep it alive because it benifits them.
JMHO
Glenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
I like the idea but it would need banks to be on one computer platform and sharing info which would not happen. I still say that if someone has 100 cheques and has to scan every single one and the cashier has to input an amount it will not only increase queueing at cashiers but also be unpractical per se. You could I suppose have a cheque only cashier but that doesn't take into effect all branches and small non-computerised branches that exist. The cost would outway the gains unless there is a solution to the length of time someone takes to actually key it into the system. It would without doubt increase fraudulent use of cheques. I'm gonna go with the system you suggest with my reservations inherrent. My next question is how do you prevent fraud within the new system? I'm not suggesting that the current one is any better but if we are making the cheque clearing system quicker we need to have a better way of fraud prevention as well.
I dont agree about the computer issue and sharing data issue.
Currenlty i can use my bank card in any atm from any bank so they are already sdharing data.
Re the queing issue, accept that there may beimplications, all i can tell you is that it seems to me that the system is perpetuated to makew moeny not for any practical reasons.
Take security for example, we know, because people have given anecdotal evidence about the wrong signature, in our company someone was signing cheques because they used to be a signatory. They signed the payroll cheques for several month, the total amounts were a few hundred K collectively and yet non one at the bank picked up the fact that he was signing. he had been removed from the authorised signatory due to an oversight.
So the current system is not working. Im not too sure exactly what they current system achives that could not be achieved with the right application of current technology if there was any desire.
GLenn
Kick the shAbbey Habit
Where were you? Next time please
Abbey 1st claim -Charges repaid, default removed, interest paid (8% apr) costs paid, Abbey peed off; priceless
Abbey 2nd claim, two Accs - claim issued 30-03-07 Barclaycard - Settled cheque received
Egg 2 accounts ID sent 29/07 Co-op Claim issued 30-03-07
GE Capital (Store Cards) ICO says theyve been naughty
MBNA - Settled in Full
GE Capital (1st National) Settled
Lombard Bank - SAR sent 16.02.07
MBNA are not your friends, they will settle but you need to make sure its on your terms -read here Glenn Vs MBNA
Bank's Cheque Clearing System
that this 3 day void creates, but we shouldn't have to tolerate it in this day and age. The Banks have had it their way for so long I feel that it's time that they dragged themselves into the 21st century and started giving real value and service to their customers. I understand that the OFT have been investigating this, but it really shouldn't take that long seeing as the banks already have a system in place.
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Originally Posted by natweststaffmember
