marty_t3

I found a cheque for a refund i got from Scottish power a few weeks ago. It was only for 40 quid but i got my girlfriend to pop into the bank anyway and deposit it into my account. The cheque was a Royal Bank of Scotland cheque and it was being paid into a royal bank of scotland account.

My girlfriend asked at the counter if it would be ok to put the cheque in as it was old (had been lying in a drawer for months). The teller said it would be fine.

The cheque went into my account on the Thursday so i assume it would take 3 full working days to clear. I checked the account yesterday (4 full days after the cheque was deposited) and found the money in my account. I withdrew some cash leaving only 20 quid in the account.

I got a letter from the bank today saying that the cheque had come back unpaid as it was out of date. The bank were trying to charge me for being overdrawn as the money from the cheque hadn't cleared. I agrued my case that the account was not overdrawn through any fault of my own but they insisted on charging me. The banks are telling me that it takes 5 working days for the cheque to clear so i shouldn't have touched the money in my account until then.

Where do i stand on this??? I always thought that if the money from a cheque was made available in your account that it had been cleared???

P1Fanatic

If the money was visible in your account then I dont see how they have a leg to stand on. But thats just my personal opinion - I know nothing of banking laws etc.

Simon.

marty_t3

The money was visible in the account the day after it was deposited but only showed as available/withdrawable funds after the 3 working days. I assumed that was the cheque cleared??

I'm not all that bothered about the cheque itself but it's the charges that i'm concerned with... I'm trying to clear up my credit rating and this won't do me any favours.

Devil's Refugee

Hmmm.
Royal Bank appear to be at fault here, a cheque does not take 5 days to clear normally.

However, when was the cheque dated (can you remember?)
If more than 6 months, then it's returned unpaid being out of date.
The money will show on your account as uncleared funds, which it appears you can now draw against.
But when the cheque hit clearing, the paying bank flagged the out of date situation and a report would be produced in Cheque Truncation. Pleb would pull the cheque and bounce it against your account, which is now overdrawn I take it ?

If the cheque was out of date, I'd request a copy of it to make sure from your branch. You can argue with your branch and they may waive the charge on this occasion being a one-off and also point out the idiot who told you it was fine to lodge it.

Unfortunately, I was in the unenviable (!) position of bouncing cheques for a living some 7 years ago for a Bank !

[Edited by Devil's Refugee - 1/24/2003 3:22:24 PM]

brickboy

I would also argue that when paying the cheque in, the teller was consulted and advised it would not be a problem. You shouldn't have to pay charges.

marty_t3

I had a word with a few folk at work (here in the Halifax IT Centre). They seem to be under the same impression.

I called the bank back and after about 10 minutes of heated arguements with some cheeky b*t*h at my branch, they have agreed to refund the charges. She stated that in future i would not get any refunds at all. I argued that this was not my fault and that in future, I expect to be refunded for any similar errors. She disagreed and refused to back down.

I'm making an appointment with the financial advisor who set up my account to get him to sort it out. I'm p155ed off enough to close the account right now though. Banks.... F***ERS.

TopBanana

Interesting. I've paid cheques in before that were > 6 months old

Hos

iTrader: (1)

I think its wrong that when a cheque is payed in to your account, it shows up credited on statements but it hasn't actually cleared. But this is the system the banks use.

The cheque can be cancelled anytime during that 3 to 5 day period. Maybe worth checking with the bank each time you pay in a cheque to see exactly how long it will take to clear.



[Edited by Hos - 1/24/2003 4:29:50 PM]

Jon1T

I used to work for RBS (doing PR) and had this question a lot from journos...

The cheque is shown as credited to your account balance normally 1-3 days after you pay it in. All this means is that your account balance is shown with the 'credit'from the cheque added.

The actual 'funds' ie the money from Scottish Power won't be cleared into your account until the fifth working day.

So RBS are right - although your account is shown from day 1 as having the cheque credited to your account, you cannot draw on the money until the fifth working day.

This is becuase of the cheque clearance process, where RBS have to actually obtain receipt of the money from the payee (Scot Power) which is a long process, then put the money in your account.

I appreciate it's confusing - they shouldn't show the money on your account balance until the money is actually resting in your account. So I'd coninue to take up the matter with RBs - say you acted in good faith and you were rightly understood that when you saw the money added to your account balance you thought the money was in your account.

They will let you off if you are persitent - if not write to the customer service manager at head office - ask the branch for the contact.

Amanda-Jane

Where I work (First Direct) we have to tell our customer that "the cheque is available to draw against on the fourth working day but please bear in mind that a cheque can be returned art any time" We get told to say that to cover our backs against charges etc.

In training we were told a cheque can be returned up to one year after being presented!!

AJ

Chrisgr31

I thought that most banks would show the money as being in your account but you wouldn't be allowed to draw on it until it cleared.

In addition does a cheque have an expiry date? I know that people say they expire after 6 months but I thought I had read somewhere that in fact there is no expiry date on them?

The simple fact is that if Scottish Power owed you the money they owed it to you. It is to their benefit that you haven't cashed the cheque earlier, but they still owe it to you. Therefore what right do they have to say the cheque has expired?

Chris

marty_t3

I'm just wondering why the cheque showed on my account for 3 days while not available for withdrawal (which seems normal), but then on the 4th day i can withdraw it from my account. To me that means the cheque has cleared as the bank have made the funds available to me.

Why would they clear the cheque in my account without waiting for the cheque to clear at the bank who issued it (in this case, the same bank on behalf of Scottish Power).

Luckily it was only 40 quid but if it had been for hundreds then it could have been a disaster, all because i took money from my own account that my own bank said i had available

On top of that, they tried to charge me for processing the cheque, and then charge me again for being overdrawn when they debit my account to the value of the cheque. All i did was pay in a cheque and then withdraw money from my account

Jon1T

marty - if you explain the problem to the branch customer service manager and say you beleived he money was in your account after four days to be drawn on and you acted in good faith, and that you contest the charges they may drop them. But don't get irate cos they'll tell you to p*ss off...

Amanda-Jane

Some banks actually let you withdraw upto £100 of funds going thru the clearing cycle - providing the cheque value allows!

AJ

chiark

The cheque should not have been cleared, it is outside of the period of validity for that cheque. Scottish power might well have complained which is why it took so long. Easiest thing to do might be do have scottish power raise you another cheque.

TV (technical verification) of cheques is done by the payor bank, always, as they're the only people who have the mandates to verify against. If it fails, it'll go back to the collecting bank as a returned unpaid and at that point you'll have the credit removed from your account.

Strictly speaking, this is your problem not the bank's at all. The fact that they allowed you to pay it in means nothing as they do not hold scottish power's mandate unless scottish power's branch is the same as yours (which it won't be because it's a head office collection account). Anything they do is out of good will believe it or not, no matter how incensed you feel.

Blame EDS. They process Scottish Power's cheques

Cheers,

Nick.