cheque clearance times.... what a joke

[Prangers]

i have had to deposit a few cheques into my account recently (thanks to charges refunds) and i have got to say what a joke . how can it seriously in this day and age take 5 days for a cheque to clear so you can spend the funds. surely its just a case of inputting figures and trasferring funds from the payees account. if i pay by card in a shop i enter my pin and the money is transfered straight away. why does it take sooooo long simply because the details are on a peice of paper.

 

is it so the banks have a few days to play with the money floating in stocks and shares?????

 

sorry just makes me angry lol

[MONX]

I also had this, paying in the costs I was awarded from Ist credit, it seems we share the same bank but because we have different branches it still took five working days?

 

I am told it Europe it only takes one working day for personal cheques and paycheques etc are instant.

 

Makes you wonder what they do with it for those four days extra.

[Prangers]

just phoned the bank to ask when the cheque will clear that i paid in last friday. they say it will clear by tomorrow but i wont be able to spend it till friday............. surely if it clears tomorrow i should be able to spend it tomorrow grrrrrrrrrrrrr

[ukaviator]

The banks have their reasons, although it should be a lot quicker, but here is a run down of what goes on.

 

Bank Clearing System:

 

If you pay a cheque into Bank A for clearance in Bank B, then on the first day when the cheque is paid in it is actually processed by Bank A during that same evening. The details of the cheque (not the payment) are also registered at Bank B at the same time.

 

On the second day Bank A delivers the cheque to an exchange centre and Bank B takes it away.

 

On the third day staff at Bank A will review all the cheques drawn on the account and decide whether there are enough funds to pay the amounts required. Before the end of this third day the two banks pay each other the amount owed, or not, if the cheque “bounces”.

 

It is these bounced cheques that are then returned to the issuing bank in the post. So in our case, that would be Bank A, but they don’t get back there until either the third or fourth day, sometimes later, if they are delayed in the post!

 

If the cheque clears, then it will do so through the account in Bank B on day four. Supposedly, this gives the bank enough time to deal with bounced cheques… of which there are a lot. Although 99% of cheques clear successfully there are still something like 30,000 bounced cheques in Britain’s banking system every day.

 

Four days to clear that cheque you received from Mr A Conman in return for that dodgy Ford Fiesta you sold him will ensure the bank doesn’t lose out by processing a fraudulent cheque…as long as HM postal service works efficiently. And that seems to be what the Banks revolve around, giving themselves enough time to avoid being stung by bouncing cheques. Plus the day or so in which they can earn interest on these hundreds of thousands of cheques floating around waiting for processing.

 

I ask for electronic transfers now and not cheques.

[Prangers]

but that is exactly why it winds me up. why does all this need to happen. surely in this day and age a cheque is basically a paper version of using a debit card. why are they still using snail mail to send cheques up and down the country its ridiculous.

 

the other thing is in my case the cheque that im waiting to clear has actually been issued by another bank...... not a mr conman....... i use ebay and paypal to find these lol

[ukaviator]

I'm not sure if the banks still have this facility, but you could a few years ago "Express" a cheque through the system for a fee. So it can be done without the wait.

[Prangers]

well i asked alliance and leicester if they offered this and they said they did it a few years ago but dont offer it anymore. you just cant win with the banks lol

[eyeofhorus]

Payments by a debit card dont go straight out of your account and any refunds to a card also dont go on straight away.

[Prangers]

lets say i had £200 in my account...... i buy something for £150 . if i then went into the next shop and tried to spend a further £100 the transaction would be declined so yes the money has left my account. it doesnt matter which way you look at it that money is no longer available for me to spend.

 

with regards to refunds i cant remember the last time i took something back to a shop so im not sure.

 

just seems like the banks use the time between banking a cheque and lettting us drawn on the money to simply gain interest. while we loose out ........... as usual

[Castlebest]

Electronic transfers get me, its a total rip off.

 

I'm self employed so have a business account and a personal account, when I pay my meager wages between the two by electronic transfer it disappears from my business account the second I press the pay key... it appears in my personal account 3 days later ,

 

If it wasn't cleared funds my business account wouldn't allow the payment so why the delay?

[SOD'EM]

lets say i had £200 in my account...... i buy something for £150 . if i then went into the next shop and tried to spend a further £100 the transaction would be declined so yes the money has left my account. it doesnt matter which way you look at it that money is no longer available for me to spend.

 

If you spent £150 in Argos for instance, the money would indeed no longer be available for you to spend next door. But Argos don't physically receive the money for 3 days. A debit card is really just a piece of plastic that informs the shop that you have got money available, but they will have to wait 3 days for it. Banks make more money in interest during this time than they do on cheques.

 

If you went to a cash machine after spending £150 and asked for a balance, it would say-

 

Balance £200

Amount Available £50

 

This is because the bank knows they have to give Argos £150 in a few days.

[Bona]

I do have to say if I teansfer between any two barclays accounts weather its mine or not its instantanous also some direct debits which come into my account are also instant some are not depends where they are coming from But cheques for me its 6 days unless they are drawn on the same bank then its instant

[Gilbert_O'Sullivan]

I thought it had been proven beyond doubt some years ago that cheque clearance in the UK takes so long simply because it is an earner for the banks?

 

There was talk years ago of the UK being brought into line with other countries but it still hasn't happened.

[Prangers]

well it should surely be looked into again. its simply impossible in this day and age for something as simple as a money transfer to take so long. there is simply no arguements the banks could possibly make to justify it taking so long. with the amount of technology in the world these days the only reason it takes sooooo long is so the banks can make more money on our money and provide a snail pace service.

[beachcomber60]

GE Money sent a default notice because my cheque didnt clear in time, gave them grief as I had sent it four days before payment date & was told by them that it takes 10 days for cheque to clear.

Edited November 14, 2008 by beachcomber60