guaranteed cheque dishonoured

[1971andrew]

I have recently paid 3 guaranteed cheques into my account. They were from Natwest and were all correctly 'backed' with the long card number, expiry date and were signed in front of me, the signature matching the bank card signature strip. Natwest has returned all 3 cheques stamped 'refer to drawer not drawn in accordance with cheque card criteria'

All 3 cheques were from the same account, I got them on different days and were taken in good faith for goods I supplied. Obviously there were no funds in the guys account and I have now learned he is in China so he was clearly trying to 'pull a fast one'

Despite this, surely the bank must honour the cheques. I went into my local Natwest and made a teller phone the cheque cashing place who said that the guys signature didn't match the signature they had on record. I have known the guy for a couple of years so it was definately his cheque book and not stolen.

To make matters worse Barclays let me draw on the cheques the next day then took the money back and charged me £30 although I know this isn't Natwests fault.

Who do I write to or phone and what do I say, is there some law that lets the banks get away with this.

 

Any advice would be welcome.

 

Thanks.

[Andy Williams]

There is no law that allows banks to do this ...but they have been doing this for a while.

 

I used to have a restaurant and we would religiously take all cheque guarantee card details and the banks would still on occasion dishonour them.

 

I think they particuarly try this on with small businesses and try and shift it to thier problem.

 

1) you need to check that you did fufill all criteria when taking the cheques. If you missed some information they will use this as an exscuse not to pay.

 

2) Are you a LTD company or a sole trader -you may need to prove that you are a business and the cheques were received for goods/services supplied?

 

In the long run pretty much every business are giving up on cheques as a guaranteed payment.

[Andy Williams]

sorry did not address other point you made.

 

If you are a business and checked the signature against the cheque guaranteed card you have fufilled your requirements regarding checkage and should be paid. ... However I reiterate I have argued until blue in the face before and have not been paid. Even Sainsbury's etc will not take cheques any more. You are probably fighting losing battle....

[1971andrew]

Thanks for the advice, someone else has advised me to write to the bank asking for a definitive reason why the checks were refused, complain to the ombudsman, and possibly use MCOL to get the cash.

 

I think I'll give that a go.

[lookinforinfo]

Providing you complied with the terms of the guarantee, including the fact that it was not the drawer who wrote the details on the back of the cheques,

then the fact that there is no money in the account is irrelevant. That is the

whole point of the guarantee. That the banks have agreed that they will honour the cheques even when there are insufficient sums in the account to cover the cheques. This is what gives traders etc

confidence to accept cheques from people they do not know.

The way round it is to ask for an explanation from that branch in what way the cheques were not drawn in accordance with the cheque card guarantee,

and advising them that they have x number of days to honour their guarantee

or you will take them to Court.

The banks used to try it on with a company I used to work for, but the threat of litigation was sufficient..

[1971andrew]

Thanks lookinforinfo, I have drafted this letter for the bank

 

Dear Sir/Madam,

 

Ref Cheque No: ******************

 

I recently presented a cheque (copy enclosed) to my bank for payment, this was a guaranteed check that I accepted in good faith for goods I supplied. The cheque was completed and signed in front of me, the guarantee card was valid, in date and the signature matched the specimen on the card. I entered the correct card number and expiry date on the reverse of the cheque myself and filled in the relevant boxes.

 

This cheque was returned to me marked:

 

“REFER TO DRAWER NOT DRAWN IN ACCORDANCE WITH CHEQUE CARD CRITERIA”

 

I have spoken to RAC Legal Advice and also Barclays Legal Advice (Capita Assistance Ltd) both have advised me to write this letter to you asking exactly what are your “cheque card criteria” and also exactly which part of those criteria this cheque is “not in accordance” with.

 

I require a complete, definitive and unambiguous reply.

 

If I do not receive a satisfactory reply within 14 days I will send a copy of this letter and also a copy of the cheque involved to the Financial Ombudsman Service as an official complaint. I will also file a small claim using MCOL.

I am hoping this does the trick, but if I have to use the the MCOL route I am very confident of success.

[Gogivit]

Don't forget to check your spellings! (one cheque written as check!)

 

I spent many years as a retail manager and not one cheque returned. It is worth noting though, that everyones signature does slightly vary each time.

 

I think the bank knows the guys done a runner and just fobbing you off. A gaurenteed cheque should simply be gaurenteed!

[lookinforinfo]

That letter should do the trick. Do not be fobbed off by thing like "the

signature did not match that on their records". The signature should match the one on his card not their records. And if the signatures did not match, then the cheques should have been returned "signature differs", not "Refer to Drawer".

[make them aktiv runners]

There are millions of cheques cashed every day and banks simply do not check signatures to their records. If they did it would take much longer to clear a cheque! They will only stop a cheque if the written details are wrong (eg amount in words differs to numbers) or at the account holders request. The latter has probably applied here.

 

Just one other reason, the cheque would have bounced due to insufficient funds if not guaranteed. OP stated wrote long number down on reverse of cheque - that is the wrong number (should be card number).

[1971andrew]

They will only stop a cheque if the written details are wrong (eg amount in words differs to numbers) or at the account holders request. The latter has probably applied here.

 

One thing I know for sure is that you cannot cancel a guaranteed cheque. Also a couple of days after after I received the cheque he wrote another cheque to cover a meal bill at my local pub, I watched the landlady 'back' the cheque (exactly the way I backed mine) and her cheque cleared with no problems. I feel that they are just trying it on with me because I am a private individual not a business. The landlady has offered to come to court with me to give evidence if it goes that far and has even offered to have her solicitor attend as well to represent me which is a very generous offer. She doesn't like the banks either !

[lookinforinfo]

Andrew, one thing they could renege on is whether the three cheques, though drawn on different days were part of the same transaction. IE if the

guy bought something for £150 say, and you took three cheques for £50, all

dated differently, that would contravene their guarantee regulations. However,if the £150 was made up of a number of separate items, none of

them exceeding £50 individually, then the bank must honour the guarantee.

[make them aktiv runners]

One thing I know for sure is that you cannot cancel a guaranteed cheque. Also a couple of days after after I received the cheque he wrote another cheque to cover a meal bill at my local pub, I watched the landlady 'back' the cheque (exactly the way I backed mine) and her cheque cleared with no problems. I feel that they are just trying it on with me because I am a private individual not a business. The landlady has offered to come to court with me to give evidence if it goes that far and has even offered to have her solicitor attend as well to represent me which is a very generous offer. She doesn't like the banks either !

 

To give an extreme example, bank terminates account and demands chequebook etc back. Account holder does not hand anything back but instead writes a series of guaranteed cheques. Do you seriously think the bank will honour payment?

 

Did the landlady write the long number down that you did? Even if she did, it is possible that he had sufficient in his account by the time her cheque came to clear (money could have gone into the account in the 2 days between the cheques).

 

The long number does not make it a guaranteed cheque and therefore the bank does not have to honour it. The long number (which includes the actual account number within it) is for switch transactions. The shorter card number (at bottom of card) is the number to use to make a cheque guaranteed.

[make them aktiv runners]

I went into my local Natwest and made a teller phone the cheque cashing place who said that the guys signature didn't match the signature they had on record. Thanks.

 

The above may just be a fob off as they cannot disclose some criteria toa third party, eg insufficient funds, due to data protection. Just in case it is true, I did previously mention that signatures are not routinely checked. The only time they would check is if the account holder reported cheques missing, the bank would then be obliged to assume the book has been used fraudulently and check very carefully before allowing transaction through. A changed signature will look fraudulent to the bank as they cannot see the actual cheque card.

 

I agree you have a case to recover your money, it is however, only likely to be from the account holder.

[Its WAR]

3 tips: Photocopy the card for any unusual transactions, this way you can prove the signature on the card did match.

 

Also check that the signature matches by comparing the signatures on the card and the cheque UPSIDE DOWN. Fake signatures look much more obvious upside down. I

 

Also, if you are taking 3 cheques for one transaction, (possibly post dated). Make sure the cheques are not written one after the other from the cheque book.

[blazing-badger]

The long number does not make it a guaranteed cheque and therefore the bank does not have to honour it. The long number (which includes the actual account number within it) is for switch transactions. The shorter card number (at bottom of card) is the number to use to make a cheque guaranteed.

 

Sorry, but this could not be more wrong. The long (16 digit) card number is unique to the card and does not contain the account number. The short number is the account number. It is essential to quote the long number as the account number is obviously on the cheque itself already.

[lookinforinfo]

To give an extreme example, bank terminates account and demands chequebook etc back. Account holder does not hand anything back but instead writes a series of guaranteed cheques. Do you seriously think the bank will honour payment? .

 

Yes the bank would have to honour the cheques. That is the whole point

of the guarantee. And that is why the banks usually wait some time before granting these cards to see how the account is being operated.Bear in mind that the cheque guarantee system came into being before there were credit cards, let alone debit cards. Up till then

traders were very reluctant to take cheques, and with the advent of the CQ system, it became easier to have your cheque accepted wherever you went

with your card.

[lolly371]

Sorry, but this could not be more wrong. The long (16 digit) card number is unique to the card and does not contain the account number. The short number is the account number. It is essential to quote the long number as the account number is obviously on the cheque itself already.

the long number along the middle of my guarantee card comprises of four numbers, followed by the sort code, and then the account number. the short number at the bottom is not the account number. perhaps it is dependant on who the bank is?

[make them aktiv runners]

the long number along the middle of my guarantee card comprises of four numbers, followed by the sort code, and then the account number. the short number at the bottom is not the account number. perhaps it is dependant on who the bank is?

 

You may well be right there lolly. My short number is definately not the account number, the long number in the middle does contain the account number, hence my original posting.

[1971andrew]

Thanks for all the responses,

 

Can anybody tell me for certain which number should be on the back of this NatWest cheque. I have always taken the long number in the middle of the card in the past, but I do know that NatWest cards do have a 9 digit 'card number' printed on them as well as the long number.

 

Everyone I have spoken to says the long number is the correct one, but I would like to be sure before I waste money on the MCOL fees.

 

So far I have heard nothing from NatWest,

 

Andrew

[make them aktiv runners]

It is an easy question for NatWest to answer over the phone. Their call centre staff should know. Just keep the question simple, ie I have a customer who is goingto write me a cheque, which number off his card do I need on the reverse to make it a guaranteed cheque? The actual details of your friend are not relevant to the callcentre as they will effectively be sidetracked from what you are asking.

 

My account is not with NatWest, but I do remember my bank telling me which number to write and I am pretty sure I got some leaflets pointing it out too.

[1971andrew]

It is an easy question for NatWest to answer over the phone. Their call centre staff should know. Just keep the question simple, ie I have a customer who is going to write me a cheque, which number off his card do I need on the reverse to make it a guaranteed cheque?

 

Thanks for the advice, just phone 2 local branches who have both agreed that the guarantee number is the long 16 digit number across the face of the card and just to be on the safe side I called NatWest customer services as well.

 

14 Days are up tomorrow and I will start an MCOL claim on the 10th when I get paid.

 

Thanks for all your help and advice CAG'ers I will keep you informed

[Guest peed orf]

Just a quicky, the long number on the card is not the cheque guarentee number it is debit card number, the small number on the bottom of the card plus the expiry date are the guarentee, if your card does not have the small number at the bottom apporx 7 -9 number long, then it is not a guarentee card. this what was explained to me by Natwest as I understand it

[1971andrew]

Just a quicky' date=' the long number on the card is not the cheque guarentee number it is debit card number, the small number on the bottom of the card plus the expiry date are the guarentee, if your card does not have the small number at the bottom apporx 7 -9 number long, then it is not a guarentee card. this what was explained to me by NatWest as I understand it[/quote']

 

When I phoned the branches I said

 

" I'm about to accept a cheque from one of your customers and want to know what information I need to put on the back to guarantee it. "

Both branches and the customer service centre said "use the long card number and the expiry date"

I specifically asked "you mean the 16 digit number printed along the face of the card ?" they said "yes that's the one" I also made a point of asking "is the 9 digit card number relevant ? should I add that as well" they said "No, just the long card number and the expiry date"

I asked "so a cheque with this info on will definately be paid and can't be cancelled ?" they said "yes, thats what the guarantee is for"

 

The customer service line was a bit vague but both local branches knew exactly what they were talking about and went into some depth about how the number was used.

 

As always I recorded all 3 calls. I'm not sure if I can use them in court but I have them anyway.

 

Due to the postal strike I am giving them an extra week to respond but i will then make a MCOL.

[blazing-badger]

I agree with Andrew. The long (16 digit) number is the card number. The purpose of quoting it is to demonstrate that the card was present when the cheque was signed. Not all guarantee cards have the small number at the bottom, and in any case this is usually the account number. As this is also printed on the front of the cheque there would be little point in writing it on the back too.

[make them aktiv runners]

I agree with Andrew. The long (16 digit) number is the card number. The purpose of quoting it is to demonstrate that the card was present when the cheque was signed. Not all guarantee cards have the small number at the bottom, and in any case this is usually the account number. As this is also printed on the front of the cheque there would be little point in writing it on the back too.

 

We have already ascertained that the number to be used varies between banks. The OP and another have been given opposing information by the bank in question, NatWest.

 

As A MCOL is likely, I would advise the OP to check out the following:

1) Get written confirmation of the number NatWest use (possiblt extending to each of their account types).

2) If the bank has closed the account but the account holder has produced further cheques, would the bank have to pay them? (personally I think it is fraudulent activity by the account holder)

3) How many cheques were produced? If more than 1 then were they for the same thing? Was the cheque under the gurantee value on the card?

3)