NotoriousREV

My uncle wrote a cheque for £9000 to my sister so my sister paid it into her Halifax account last thursday. She wants to take the cash out on monday (thats monday next week) so, it being a large sum of money, she advised the branch that she wanted to order the cash.

The branch say she can't take the money out for 12 days after paying it in because my uncle could recall the cheque. They say if he visits the branch with ID and promises not to recall the cheque, she can have the cash. Seeing as he lives 4 hours drive away, that ain't going to happen! They then gave the option of him getting his bank manager to write a letter stating that my uncle has the cleared funds available and that he won't recall the cheque.

Has anyone ever heard of this before? Strangely enough, I got a very similar cheque from my uncle which I paid into my account and it cleared within 3 days and I'm able to draw on the cash whenever I like (LloydsTSB account)



EDIT: I've already e-mailed Watchdog

Rumplestiltskin!

The longer a bank has the money, the more interest they make on it......so they aint in any rush to release funds....quite the opposit.
Maybe your bank & your uncles bank are the same ? This reduces the time it takes to clear.
Not sure what watchdog can do, Halifax have a policy that I doubt they can be forced to change.

Next time he should do a direct transfer of funds, though he might be charged an admin fee to do it.

Banks HATE cheques, they take many more man minuted to process than electronic transfers, so not surprised they make it a long & awkward process to bank/clear one.

Ro.

minor_threat

REV, if your uncle sends me a very similar cheque I'll put it into my account immediately and try this 12-day theory out. I've never heard of this before, 3 days is the longest I've had to wait for any amount of money, whether it's a cheque being paid in or cash being withdrawn. Even the 3 day wait for a cheque to clear pisses me off and there's no logical reason for it, other than banks wanting to make money on the interest whilst they hold the money. If you go to most European countries and pay a cheque into the bank the money is available within a few hours.

King RA

But you have to pay for the privilege of banking with most European banks.

chiark

You don't know how cheque clearing works in the UK, do you?

Without significant legislative changes, it will be impossible to accelerate clearing. Pieces of paper have to move around, and it's a bloody expensive process. The company I'm working for is trying to reduce clearing cycles, but without a change in rules, it won't happen.

fast bloke

Halifux have always done this. They made me wait a week once to withdraw money that had been deposited into my account in cash at another branch. How the fek do you clear cash?

minor_threat

Yes I do. I work in fraud prevention and need to know about financial systems to do my job. In a nutshell, the bank receives your cheque and sends it to the banker's central clearing centre before 3.30pm for processing. They call this day one. On day two the cheque arrives at central clearing where it takes a whole day to be processed. Day three sees your cheque being sent back to the bank and providing they receive it before 3.30 pm they debit your account with the transaction.

There is the exception of "special clearance", where your cheque can be magically processed in a much shorter space of time. This isn't usual practice because banks want to retain money as long as they can, and they charge extra for special clearance but it does show that when they get their ***** into gear they can drastically reduce that 3 day wait.

The process is hindered by Section 45 of the Bills of Exchange Act 1882 (a nice modern law then), which requires cheques to be returned to the branch on which they were drawn for payment to be made. APACS has been lobbying to get his changed for years, and in 1995 the Treasury finally agreed to sponsor legislation for cheque truncation by seeking an amendment to Section 45. The legislative change was made in the Deregulation (Bills of Exchange) Order a year later. In the system of truncation, the movement of the cheque has to be halted at some stage during the clearing cycle and payment made electronically rather than by the physical presentation of the paper cheque at the branch address printed on the cheque. This can be made a lot faster by retaining the cheques at a central point at an earlier time in the clearing cycle, or even changing this to a point within the collecting bank.

So you are correct about the need for legislative changes. Even the Governor of the Bank of England has called for cheques to be cleared more quickly because it can cause hell for small businesses waiting to pay suppliers or staff. He acknowledges the 3 day wait is ridiculous. Banks, however, do not think it's ridiculous and would rather follow regulation drafted in 1882 than react quickly to any current changes in legislation which may appear.

GC8

*Minor Threat shows his **** to the forum*

NotoriousREV

Aaargh, the story continues! I paid another cheque into my account last friday and need to spend the money today and it won't clear until tomorrow, taking 5 days. Apparently my bank's policy has *always* been 5 days, sir. Funny how no other cheque I've ever paid into that account has taken 5 days before!

They're just a bunch of thieving, greedy b*stards, IMHO.

Gimme my money!

I can live with being skint, but having money you can't touch is unbearable!

Dracoro

Why don't you change banks?