I know why returning a cheque cannot legally be a service!

[southyorksman]

The banks argument that returning a cheque is a service cannot possibly be upheld.

Why?

1. I was told a long time ago that writing a cheque, when you know you have insufficient funds to honour it, is technically illegal ( I think it is fraud but I am willing to be corrected on the exact law being broken).

2. It is also illegal to contract with anyone to assist with or carry out an illegal action.

1 + 2 = 3. Therefore if the bank contracts with us (the consumer) to bounce our cheques then it is aiding and abetting an illegal act, which voids the contract.

It’s a very simple argument but I believe a compelling one!

Prove me wrong people, prove me wrong!!

IAN

[callumsgran]

if the bank bounces your cheque how can they be aiding and abetting?

[southyorksman]

They are complicit in and profitting from an illegal act.

 

They are complicit in defrauding say "the shopkeeper" who provided goods in return for the cheque and by charging a service fee for the process of bouncing the cheque they are then profitting from the illegal act.

 

Is that not so?

[stax68]

Nice idea, but I don't think that it will work.

 

If we're not talking about a guaranteed cheque, then you could draw the analogy with a forged banknote. A crime is committed when someone uses it to get goods. You wouldn't say that by refusing to accept a forged banknote when the victim tries to pay it in, the bank is complicit in the crime. The victim is already out of pocket when they accept the note, they just don't find that out until the bank exercises its right not to accept it.

 

There are some cases which are possibly of some use as they give a precedent for unauthorised ODs being in breach of contract even though the bank allows them to happen (like in our cases) - though in those cases the point was that a guarantee card was used, so the bank 'felt itself obliged' to honour the cheques.

 

They are pretty dodgy decisions (in my humble opinion) which are based on a provision from the 1968 Theft Act which is meant to prevent people deceiving the bank into lending them money. The judgements involved saying that the defendant 'deceived' the shopkeeper (or whoever) into thinking that issuing the cheque was within their authority (yeah right, when the cheque is guaranteed the shopkeeper really cares about the details of your bank balance ). And they then ruled that by means of that deception the defendants got the bank to lend them money (i.e. extend their OD). So the party supposedly deceived was not the same party from whom the pecuniary advantage was got, which is a bit rum if you ask me - especially as a reason for banging someone up.

 

Here's a very brief summary of one of the main cases:

 

1982 WL 221821 (CA (Crim Div)), [1982] Crim. L.R. 369

R. v Waites

Court of Appeal (Criminal Division)

15 February 1982

Abstract:

W used her cheque card to create an unauthorised overdraft of more than GBP 850.

Summary:

Held, dismissing W's appeal against convictions of obtaining a pecuniary advantage by deception, contrary to the Theft Act 1968 s. 16, that W had been "allowed" to borrow by way of overdraft within s. 16(2)(b), even though in doing so she was acting in breach of contract, and had therefore obtained a pecuniary advantage.

 

Legislation Cited:

Theft Act 1968 s. 16

Followed by:

R. v Bevan (David John), (1987) 84 Cr. App. R. 143; [1987] E.C.C. 372; [1987] Crim. L.R. 129 (CA (Crim Div))