cheque clearing times

I've been told by banks that it can be returned weeks or months afterwards.

You can get them to check - this is called "Special Presentation" and there is usually a charge for the service. This service involes your bank/building society calling the payee's bank/building society and asking if that particular cheque will be paid. If they say yes then even if the payee stops payment or goes overdrawn etc, his bank will pay (i.e. they will not allow him to stop the cheque by any means).

If you do not opt for special presentation then the cheque clearance cycle involves 5 working days. It is all explained at the APACS website:

Bear in mind that since you are paying in via a Bulding Society, extra delays may be involved in them paying the bank into their clearing bank and again when they withdrawn the money from their clearing bank. For the sake of reference, my bank (HSBC) has also stated that a cheque can be returned up to 6 months after presentation but that if you wait a clear 6 working days, if the cheque has not been returned, it is unlikely to be returned - but not impossible.

Regards, Far

In message , Peter Saxton writes

In UK when a cheque is presented to a clearing bank then drawee must pay or bounce the cheque on the day of presentation, but has an 'excuse' period until midday the following day.

The circumstances which you describe are, I suspect, those in which the cheque takes ages to get to the drawee, i.e. foreign cheques.

In message , Far writes

This is wrong. The phone call does not check if the cheque 'will be' paid but 'has it' been paid and this can only happen AFTER the drawee has got the cheque. The cheque is posted to the drawee and the collecting bank then telephones, the next day, to see if the cheque has been paid. NO bank can predict, irrevocably, if a cheque will be paid

No, this situation was totally UK. Abbey National was the bank where I was banking the cheque and this is what they told me.

See what "Far" says in another sub thread.

In message , Peter Saxton writes

I already have. If you click on the link you will see that there is no reference to 'weeks or months' but days..

Yes it can. That what certifying is for. There would usually be a deadline set, e.g. it "will be paid if presented within 14 days".

I am not sure what you mean by 'certifying', but no bank can predict payment of a cheque it has not seen, e.g. it might have a forged signature or have a technical irregularity.

I wasn't meaning the paragraph with the link, I was meanong the following:

"For the sake of reference, my bank (HSBC) has also stated that a cheque can be returned up to 6 months after presentation but that if you wait a clear 6 working days, if the cheque has not been returned, it is unlikely to be returned - but not impossible."

In message , Peter Saxton writes

OK. But in the case of UK cheques sent through the clearing, in the normal way, this is wrong.

Fair enough. But it could confirm that funds were available and would be earmarked for a reasonable time pending presentation, and would be paid provided there were no such irregularities.

Certifying seems to have gone out of fashion but was a process which did, as you say, involve the drawee seeing the cheque. Typically Mr X would take his cheque to his branch to have it certified prior to giving it to Mr Y from whom he was buying a used car. Mr Y could then be sure the cheque was good (well, more sure than with a vanilla cheque) and hand over the dodgy motor with confidence. Better still if Mr Y accompanied Mr X to the bank so he could be sure the certification itself wasn't forged.

It is (or was) possibly to get the collecting bank to enquire of the drawee what the fate of the cheque would be if it were in the drawee's hands now. The drawee would typically reply "If in our hands now, and if technically in order, then it would be paid". Sometimes the collecting banks enquiry is met with roars of laughter, which can generally be interpreted as there is no chance of any cheque drawn by that individual ever being paid.

'Earmarking' is strictly not allowed. I think there is a case precedent for it. But it mnakes sens 'not' to earmark for many reasons, such as every payee ringing up trying to be earmarked, subsequent things happening between the earmarking and the presentation such as death, bankruptcy, a mareva injunction etc., or the drawer could just stop the cheque.

I have not come across that before.

Well, when a bank certifies a cheque, it undertakes to pay it. It might not be by earmarking as such, but it would be a foolish bank which would permit the sum total of certified amounts to exceed the account balance, or to allow the account balance to drop below that level otherwise than by paying the cheques involved, since it would otherwise have to make up the shortfall out of its own funds.

So if I had 1200 in my account and had a cheque for 1000 certified, and written another cheque for 300 (either earlier or later), the

300 cheque would be bounced even though there'd be 1200 in the account because the 1000 cheque had not yet been paid.

I'm stunned.

It seems strange that two people at two different banks were given this wrong advice.

I feel that if you phoned a bank with an actual example they would give you the same advice.

I understood that special presentation meant that the cheque was sent outside the clearing cycle by post and after the cheque was seen a phone call was made to determine if it would be paid.

In message , Peter Saxton writes

Well if one of my staff had answered the phone in that manner then a training need would have been identified. (That was some time ago, admittedly). These days staff dont get trained.

If there is a thing such as certification then the procedure you describe would HAVE to be employed, but for general uncertified cheques, then no. I think the best way to handle the certification is to transfer the amount of the certified cheque to a separate, hypothecated, account until the cheque is presented.

Ill send some smelling salts. Actually I was almost in Edinburgh tonight to see a concert at The Liquid Lounge by The Magic Band, but its sold out. So Ill post them.

In message , Peter Saxton writes

Thats true, but it isnt connected with 'certification'.