Returned Cheque Fees - Advice Needed

**Keyser Soze** · 21st September 2006 08:35

I've been through all of my statements and I noticed that one month I was charged £20 for a bounced cheque.

Is this claimable or should I just stick to claiming back the overlimit and late payment charges?

Thanks in advance.

KS

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**lee6370** · 21st September 2006 08:59

To be fair a bounced cheque does cost more to process than a late payment charge.

But as with all these charges, it's a charge for breaching your terms and condidtions, so the same rules apply.

Did it cost the bank £20 to bounce your cheque? No of course it didn't, so it's a penalty charge, and you should include it in your claim.

Good luck.

**Keyser Soze** · 21st September 2006 09:03

Thanks for the reply.

I'll include it in my claim.

**Glenn UK** · 21st September 2006 09:37

FWIW

theres a banking protocol based on an act of parliament i believe and deals with the way cheques are cleared.

Traditionally i believe all cheques went through this process which in part relies on the bank sending/taking cheques to a clearing centre and exchanging them with other banks.

The cost would obviousley be signficnat if this was done with each cheque. when i say sisgnficnat i mean compared with an electronic transfer of funds which costs portions of a penny.

Anyway I understand now that only cheques above a threshold value are treated in this way, i.e. those above £5K.

So if you get challenged on the cheque clearance fees being proprtionate then you need to enquire whether the cheque in question was actually cleared manually or electronically. If manually what was the process involved, etc.

JMHO

Glenn

**Keyser Soze** · 21st September 2006 09:44

Thanks Glenn, I'll make a note of it.

**PhantomReclaimer** · 21st September 2006 10:13

Originally Posted by Glenn UK

Anyway I understand now that only cheques above a threshold value are treated in this way, i.e. those above £5K.

Glenn

This is exactly what Northern Rock icon

told me the other week when I was querying a cheque. If this is the case accross the board then I fail to see how they justify the charge as it's effectively no different to saying "no" to a DD. If any costs are incurred then they must fall to the bank who is presenting it to the account holding bank as they are the ones who have to physically deal with the piece of paper.

P.

**lookinforinfo** · 21st September 2006 14:22

You are lucky that you were only charged £20.
I have just come across an old booklet [1977] on bank charges from my bank and
they were charging £25 then for returning cheques, direct debits and standing
orders. A blanket price, regardless of the different costs involved- hardly fair or
reasonable.
And of course, whatever costs are involved in dealing with these returns are
FULLY RECLAIMABLE against their taxable profits. Once again, their charges are neither fair nor reasonable.

As an aside to Glenn, I was surprised to note your comment that only cheques above £5k are now centrally cleared.
How do all the other cheques get back to their branches, and when? Who checks
that the smaller cheques are valid-ie words and figures are correct; the cheque has been signed; no stop on the cheque etc?

**Glenn UK** · 21st September 2006 21:21

Originally Posted by lookinforinfo

As an aside to Glenn, I was surprised to note your comment that only cheques above £5k are now centrally cleared.
How do all the other cheques get back to their branches, and when? Who checks
that the smaller cheques are valid-ie words and figures are correct; the cheque has been signed; no stop on the cheque etc?

My understanding is they dont or not at least in the clearing sense, they may be sent back en masse im not sure. The above 5k things was something i read on here im sure. But it does make sense why would a bank actually go through the process if itsw got a car number on the back, its been checked by the counter staff, etc all for a relativley small sum?

JMHO

Glenn

**lookinforinfo** · 22nd September 2006 02:00

As the man in the tv ad says "it doesn't work like that".
What used to happen was that each branch sent up all the cheques [apart from the ones drawn on their own branch] to central clearing. There the cheques were sorted into their respective banks and then exchanged.

So Barclays icon

would sort all its cheques from Lloyds icon

bank and swap them with all the Barclays cheques that Lloyds had taken.

Then Barclays would sort the cheques out into branch order and send the cheques
to their individual branches. At the branch, each cheque should be scrutinised to
see that it is in order before it is paid.

I understand that only cheques of £5000 and over are now properly scrutinised.
A dangerous practice. But does explain why many banks do not accept they have
made a mistake when paying post dated cheques. I suppose that they feel fairly
safe in carrying out this practice [of not checking all cheques] because they no
longer return the paid cheques to their customers along with the statement each month.

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