Bounced Cheque with Guarantee Card

[bottomburp]

I have just been paid by cheque. The cheque was guaranteed by a cheque guarantee card. The cheque has bounced.

 

What is the point of a cheque guarantee card if they don't guarantee the payment?

[Conniff]

Could be a few reasons for this. The card could have been out of date, the account could have been closed but they haven't sent back the cheque book and card as instructed or they are continuing to draw on an account that is having nothing deposited into it or even a stolen/found cheques book and card.

 

You should ask the bank why and then you can decide what action to take against the payee.

[bottomburp]

Could be a few reasons for this. The card could have been out of date, the account could have been closed but they haven't sent back the cheque book and card as instructed

 

OK I understand these two reasons, the card was definately not out of date. It seems the account is open.

 

or they are continuing to draw on an account that is having nothing deposited into it

 

I don't understand this reason. Why, if the account is open and there is a valid cheque guarantee card, would it make any difference if money is being paid into the account or not?

 

or even a stolen/found cheques book and card.

 

I understand this reason though this does not seem to be the case

[GreatWonder]

I've issued a cheque (years ago when I was a bit careless with my finances) that was guaranteed and consequently returned unpaid by my bank.

 

My account was heavily overdrawn and at the time I could only think that even with a guarantee card that there is a limit to how many cheques the bank would honour when technically you're breaking the law issuing a cheque knowing the funds are not available - the bank would surely be in the right not to honour such a transaction that would make them accessory to the crime.

[yourbank]

I have just been paid by cheque. The cheque was guaranteed by a cheque guarantee card. The cheque has bounced.

 

What is the point of a cheque guarantee card if they don't guarantee the payment?

You need to write to the specific bank in question and tell them they have to honour the cheque as it was guaranteed under the cheque guarantee scheme.

 

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

 

The above gives the rules and you should quote them in your letter.

[bottomburp]

You need to write to the specific bank in question and tell them they have to honour the cheque as it was guaranteed under the cheque guarantee scheme.

 

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

 

The above gives the rules and you should quote them in your letter.

 

Thank you yourbank, I will do this. That is a very helpful link. I'm about to add to your reputation count...

 

Just as a matter of interest, going back to Conniff's post (no 2) - And I assume Conniff is correct in saying the bank may have refused the guaranteed cheque because "they are continuing to draw on an account that is having nothing deposited into it" what's to stop me putting, say, £1.00 into their account. Then the bank will have received a deposit and will have to pay the cheque?

[Conniff]

That is not a 'will cash cheque at all cost' guarantee. If the account is well overdrawn they will not cash it, they are not going to sponser someone free funds until they run out of cheques.

 

You should have had an explanation with the returned cheque.

[bottomburp]

What you are saying Conniff makes a complete mockery of the cheque guarantee scheme.

[Lula]

Just a thought but the cheques may already have been cancelled. I would presume in that case, that the banks would not be obliged to honour the cheque, guaranteed or not.

[Conniff]

What you are saying Conniff makes a complete mockery of the cheque guarantee scheme.

 

Yes in a way it does, but an account that has no funds in it and hasn't for months or is heavily overdrawn is not going to be allowed to go further into debt that may never be recovered.

 

It is not statute that a cheque with that on the back 'must' be cashed, there has to be some limitation as there is with all things.

 

These limitations are in the banking code and say:

 

"provided that the cheque is legitimately presented by the account holder and in accordance with the conditions of use of the scheme."

 

If it has been presented as such, then it cannot be stopped and must be paid.

 

Do you know the person that gave it to you or was it a passing customer??

[onestressedwoman]

I have had personal cheques bounced by my bank ?

 

Never over my OD limit by much ! only thing thats taking me over my limit is charges they are applying ?

 

Got regular money coming into account !

 

Any ideas why / how they have done this ?

 

Obviously in applying charges which take me over cost me further charges

 

????????????????

[bottomburp]

Yes in a way it does, but an account that has no funds in it and hasn't for months or is heavily overdrawn is not going to be allowed to go further into debt that may never be recovered.

 

It is not statute that a cheque with that on the back 'must' be cashed, there has to be some limitation as there is with all things.

 

These limitations are in the banking code and say:

 

"provided that the cheque is legitimately presented by the account holder and in accordance with the conditions of use of the scheme."

 

If it has been presented as such, then it cannot be stopped and must be paid.

 

Do you know the person that gave it to you or was it a passing customer??

 

I thought the bank has insurance against this type of thing and that's why some people can only get "basic" bank accounts - ie no cheque books and others can get accounts with cheque books and guarantee cards.

 

I thought you could only get a cheque book if you passed the bank's credit scoring test and the value of the guarantee card is decided during that same test - that's why there are guarantee cards for different limits - there are £50 / £100 / £250 guarantee cards.

 

I thought that banks just refused to issue new cheque books to customers who ran up debts? And if those customers were really bad the bank wrote to them demanding they return the cheque book and card.

 

If what you are saying is true the bank gives customers the where-with-all - including promise to pay - and then says, tough, I don't have to honour it!

 

I don't know the person who paid by cheque.

[Conniff]

I thought that banks just refused to issue new cheque books to customers who ran up debts? And if those customers were really bad the bank wrote to them demanding they return the cheque book and card.

 

Which could be person who gave you the cheque. They may have refused to return it or had their account closed for some reason and decided to go and use the remaining cheques they have left in their book.

 

You really should contact the bank and ask them why it was returned and for the name and address of the account holder. As a trader your unlikely to be refused.

[bottomburp]

Which could be person who gave you the cheque. They may have refused to return it or had their account closed for some reason and decided to go and use the remaining cheques they have left in their book.

 

You really should contact the bank and ask them why it was returned and for the name and address of the account holder. As a trader your unlikely to be refused.

 

If the bank has issued a cheque book and guarantee card surely they are responsible for settling cheques issued. Why should it be MY problem?

 

Surely, under the DPA, I am not entitled to the names and address of the account holder. And why should i have to pursue the account holder when the bank has issued a card guaranteeing that they will pay the cheque?

[Conniff]

Well you wont get anything back if you just sit here grumping, get in touch with the bank first and see what they have to say.

[bottomburp]

Well you wont get anything back if you just sit here grumping, get in touch with the bank first and see what they have to say.

 

I am not "sitting her grumping" I am asking perfectly reasonable questions. Have you actually read the link posted by yourbank? Here's the link again:

 

http://www.apacs.org.uk/payment_opti...heque_card.pdf

 

What I am saying, albeit in a roundabout way, is that if banks issue these cards and then refuse to honour them surely the banks should be taken to court for failure to honour their committments.

[Lula]

What I would like to know is, If they are able to pick and choose whether to honour a guaranteed cheque, then why are we not able to cancel a cheque that is guaranteed?

[kabukiman]

Phone the issuing bank up, the details are on the cheque and ask why. Follow up with letter on how you followed procedure in accepting the cheque and you expect the cheque to be honoured under the cheque quarantee scheme. Thats if all relevant details are present, others such as signed in your presence and personally writing the numbers, who's to know.

I think its the case of "you better than me" with the banks. Happened to me, wrote, got reply and told to re-present the cheque and it would be honoured.

Edited February 25, 2009 by kabukiman

[Conniff]

I'll reiterate what I said earlier. Banks are not there to provide money free of charge and to just anyone. There are legitimate reason that they don't have to honour it and there are terms and conditions which state under what conditions someone can present a cheque and guarantee card.

 

"provided that the cheque is legitimately presented by the account holder and in accordance with the conditions of use of the scheme."

 

There is the chance that is was returned in error so representation as above could see it being honoured. If it was not issued 'legitimately' then it won't be honoured and no court will be able to force them to.

If it was - honour at any price - we could all make a fortune.

[onestressedwoman]

My price for personal bounced cheques within terms of account with no reason for retrn is between £10 - £25

 

They don't seem to have decided what they charge

[buzby]

What nobody has picked up on is did the OP enter the Gurantee Number of the card on the cheque? In not, the cheque is not valid, OR if one of a series of cheques on the limit to cover a higher amout, this is also excluded.

 

If the recipient did not write the number themselves, no guarantee exists.

 

All this it explained in the Terms of Use, and has been (relatively) well known for the last 30 years.

[bottomburp]

What nobody has picked up on is did the OP enter the Gurantee Number of the card on the cheque? In not, the cheque is not valid, OR if one of a series of cheques on the limit to cover a higher amout, this is also excluded.

 

If the recipient did not write the number themselves, no guarantee exists.

 

All this it explained in the Terms of Use, and has been (relatively) well known for the last 30 years.

 

Yes, the cheque was signed in front of me. Yes, I wrote the cheque guarantee card number of the back of the cheque. No, the cheque was not one of a series.

[bottomburp]

I'll reiterate what I said earlier. Banks are not there to provide money free of charge and to just anyone. There are legitimate reason that they don't have to honour it and there are terms and conditions which state under what conditions someone can present a cheque and guarantee card.

 

"provided that the cheque is legitimately presented by the account holder and in accordance with the conditions of use of the scheme."

 

There is the chance that is was returned in error so representation as above could see it being honoured. If it was not issued 'legitimately' then it won't be honoured and no court will be able to force them to.

If it was - honour at any price - we could all make a fortune.

 

With one hand they say - "Don't worry, you can take this cheque safe in the knowledge that we'll pay it because we've given our customer a cheque guarantee card." On the other hand they're saying "If we decide we don't want to do business with our customer anymore we'll penalise you by refusing to pay the cheque that we guaranteed." Now that's how people make a fortune...

 

Sounds to me as if the bank are guilty of misrepresentation.

 

"A misrepresentation is a false statement of fact made by one party to another, which, whilst not being a term of the contract, induces the other party to enter the contract."

I imagine the 2006 Fraud Act would apply.

 

And that would explain why, when challenged, a bank will honour the cheque. What's really nasty is that the bank tries it on in the first place.

[buzby]

Yes, the cheque was signed in front of me. Yes, I wrote the cheque guarantee card number of the back of the cheque. No, the cheque was not one of a series.

 

Excellent! You simply write to the bank - advising that under the terms of the Cheque Guarantee Card you have fully complied with their requirements and now call upon them to honour the cheque. Failure to do so will result in you taking them to court for the full value of the cheque, plus the appropriate costs.

 

I had to do this (threaten action) around 15 years ago, and they paid up with bad grace.

[barracad]

I'll reiterate what I said earlier. Banks are not there to provide money free of charge and to just anyone. There are legitimate reason that they don't have to honour it

 

They must honour the cheque if it has been guaranteed using a valid card and the cheque was filled out correctly etc. They have guaranteed the cheque, so they must honour it (and take the hit if it's a dodgy customer). That's why it's called a guarantee card, rather than stating on the card that they may pay the cheque if they feel like it.

 

There is the chance that is was returned in error.

 

This part I agree with. The cheque clearing process is largely automated with cheques being scanned and read by machines to be processed, it's quite possible that it could have just slipped through without being identified as a guaranteed cheque. Simply contacting the bank and mentioning the guarantee scheme, as advised earlier by yourbank should get this resolved quickly.