Bank Drafts Question
 

Can these be stopped after being handed over or are they simply cleared cash but subject to 3-4 business days to clear.? According to my NWB assistant, they can be stopped in which case the draft would not offer the same peace of mind as cash or a TT in the hands of a seller.

Anyone know for definite?

Thanks

Jerome

Jerome, a question of who you ask I think.

To the best of my knowledge, these should never be stopped once issued, otherwise - what is the point of them? Apart from fraud.

They should only be issued when someone has funds in their account, so as long as it is not stolen, you should be alright. You would have to question a Bank that stopped one VERY hard as to why it did so.

Appreciate that this may not be the definitive answer you want, but I think there may not be one! Ask your NWB chap in what circumstance he would be happy to stop one, and, ask him to think of the reputational risk that may come with it.

Oh, and you could always suggest "there may be another way!" - bet they get it all the time though!!

Matt

Ain't got a clue mate, I would have thought you should be able to find out easy enough though, whilst I have your attention, your mail box is full!!

My missus is a banker, she says bank drafts can still be stopped. She would NOT release goods unless the draft has cleared. In some circumstances you may be able to take the draft to the issueing bank (exact same branch that issued the draft, not just same bank) on the same day it was issued and draw cash on it.

IMHO sell for CASH, its the BEST way!!!

Bob

Bob, ask her in what circumstances she would stop one, I cannot think of one - unless it was stolen. Think there is a difference between "can" be stopped and "would" be stopped.

If you don't release goods until it has cleared, why bother with a draft? Just issue a cheque.

Or use EFT - Electronic Funds Transfer. CHAPS payment will be in your account in 24 hours and costs probably no more than issuing a bankers draft.

The concept of the bankers draft has changed over the years. The point of a bankers draft is that it is drawn only on cleared funds. In theory, there is no reason why it should be stopped or refused. BDs are drawn on the bank rather than the individual and in the past, for a bank to have refused to honour a draft drawn in its name would have been unthinkable. The damage to their reputation and the banking system of the day would have been devastating (even if the BD was fraudulant).

Incidently, Coutts still won't bounce a customer cheque (let alone a BD). They would not want to embarass the customer by returning a cheque. They are very much the exception however and the concept of a BD always being honoured has long since past. Banks can and do stop BDs.

EFT is much better. Payment is quicker and you can phone up to check that the funds are in your account or view it online.

Chris (ex-Coutts employee from many years ago)

She's made it more clear now...
Different banks have different rules on this, so she's quoting the HBOS (Halifax / Bank of Scotland)

Bank drafts can only be stopped if:

a) the book of blank bank drafts was stolen from the bank and its a forged bank draft you have.

b) the bank draft is lost in the post and BOTH the person who's account the funds came out of, and the person who its made out to declare in writing to the bank the the draft has been lost.

c) the draft is stolen from the person who's account the funds came out of before giving it to the person its made out to, in which case both need to put it in writing to the bank.

d) the draft is paid into an account that the payee has at the same branch the draft was issued from on the same day as being issued. In this case they can cancel the draft and pay the funds into the payee's account as cash!


My missus says they advise customers to get the person receiving the draft to ring the branch to confirm its a genuine draft, and they then confirm over the phone that its is indeed genuine.


DISCALIMER: She's had a couple of glasses of wine tonight so may possibly (but unlikely) have missed something ;)

Thanks for that guys, I was wondering what the risks are after handing over the keys/V5 form etc and a Bankers Draft in the hand. I agree cash is best but >£10k gets a bit messy! Telegraphic/Electronic Transfers can take hours to get through too as it is rarely instantaneous especially inter bank. Also, does the payer trust the payee because he loses control of his money once the "send" button has been hit? I would have concerns. There is an element of risk there no matter what and I was just exploring the various avenues open.

Thanks again.

Jerome

p.s. Ron, YHM
Matt, hope the FQ?? is still flying IIRC!

No problem Jerome, ultimately there is no ideal way of doing this!

Yeah m8 the Evo is still going as fast as ever, scarily so sometimes ;) (it's a 300 BTW). Got to say I'm definitely glad I went for it rather than the STi.

Still got your wagon?
Matt

surely theres an easier way


chap comes to view car decides to buy, both of you pop to his bank and he can issue the draught to you right infront of you

that way for a fact you know its genuine