Comet not accepting cheques

In message , Tim writes

No. See all the Bills of Exchange Acts and all the Cheques Acts. Negotiability was how their use developed.

Yes.

See above Acts. A 'Holder in Due Course', having given value in the normal course of business has the paramount title to a Bill of Exchange (of which a cheque is a sub set), and as such has right of action against every party in the chain.

Yes, that's exactly how it works.

I don't see why they wouldn't. The key element is that each transaction is traceable and cannot therefore be exploited for laundering purposes.

Heck, we have such things even in this country, though not generally paper-based. But with on-line banking, anyone can do it. Give me your sort code and account number and I'll send you a fiver, to prove it.

Yes, I used one only a few weeks ago.

Yes. Same herte.

Then you have misunderstood the description. The recipient (payee) sends you all the information you need in order to instruct your bank to *send* his bank the money. This is a pushing order, not a pulling order. Nobody is given authority to help themselves to dosh from your account, since the form, once signed by you, is sent by you to your bank, they act on it.

We're all agreed that's ludicrous, but the problem from a ML POV is that BGC slips can be used to pay in cash, which is of course untraceable, hence the ML worry. In principle, if you were to use a BGC with cheques only, there would be no problem because traceability is ensured, as it is with an internet account "push", and as it is with a German-style transfer order.

Indeed, and when you go to the Isle of Man and bring back some of their virtually indestructible plastic notes, be sure to launder them thoroughly so they are cleaner than clean, and you will derive enourmous satisfaction from money laundering safe in the knowledge that you are breaking no laws by doing so.

"john boyle" wrote

"*Every* party in the chain"? How could someone, twenty links down the chain, determine who comprised the rest of the chain (apart from, obviously, the person who wrote the cheque)? Especially if someone in the middle couldn't remember where he got it from!

"john boyle" wrote

This, if correct, is actually an incredibly alarming situation. Why on earth should someone be in a position where they can be indebted to third parties whom they have no relationship with? (legal or otherwise)

In message , Ronald Raygun writes

I wouldn't be bringing any of those back (BTW I forgot to check!!) 'cos they aren't legal tender over here BUT if you were taking BoE notes over there (Ken Dodd style) THEN you would find it harder than in UK to be able to do anything with it. Their Know Your Customer rules are more stringent these days than over here.

In message , Tim writes

Pedant ON,

it isn't a 'field' cos computers weren't around when they were designed. Dont forget a cheque book is just full of blank 'cheque forms' not cheques. The forms have all the invariable bits pre printed. I've seen some, for example, that helpfully have the date field ending in 19__ (!) Pedant OFF

sorry about that bit.

Now,

I refer the gentleman to my original answer, in which I referred him to the Bills of Exchange and Cheques Acts in which he will find the legal definitions of a Bill of Exchange and a Cheque in which he will find that, by definition, a cheque needs to be payable to some party from the outset. Although that payee can be impersonal or inexact, i.e. Cash, or Bearer, to be safely negotiable from one party to another then it needs to have a chain of title evidenced by endorsement from one party to another. A cheque form with a blank 'payee' is not a cheque. It is merely an incomplete cheque form. The existence of a 'payee' is part of the definition of a 'cheque'

Have you forgotten the bit that used to be at the end of the 'payee line'? - 'or order'? This specifically enabled negotiability. Its absence didn't prevent negotiability, its presence just made it explicit.

It was only removed when the bloody silly money laundering lot restricted negotiability of cheques with the amendment to the Cheques Act that altered the protection available to a collecting bank by the 'a/c payee only' crossing. You can still negotiate a cheque but the collecting bank can no longer assume the position of 'holder in due course' on a fraudulently negotiated cheque, no matter what. They can still accept third party cheques but the CSPU (customer service prevention unit), known as 'cashiers' to us in the know, have been trained to utter that common lie, 'its against the law to accept third party cheques' which it isn't. Its just that bank might get sued if it did.

"john boyle" wrote

Pretty silly state of affairs I'd say - there should be an instrument, not necessarily a full "Bill of Exchange" but nonetheless something which acts in the way that the layperson would expect a cheque to behave - ie, you say "pay Joe Bloggs" and it goes to Joe Bloggs, not Fred Smith down the road ... then Dave Jones then ...

So, what happens when you write a large cheque out for a big purchase, ensuring of course that sufficient funds are in the cheque a/c at the time - but the cheque is not presented to the bank until 12 months later when the said a/c now has insufficient funds?

Shouldn't be allowed!

In message , Tim writes

Well the cheque should bounce with the answer "out of date", but may not!!! (CSPU in action again). You would still owe the money though and could be sued, quite rightly.

If you've spent the dosh in the meantime, then thetas just plain careless on your part. The responsibility for maintaining a check on q bank account is down to the account holder. Thetas what statements are for. If you cant undertake this simple task, deal in cash only.

No smiley?

"john boyle" wrote

Well I could have said 5 1/2 months, but never mind!

"john boyle" wrote

Agreed entirely. And I would expect the original payee to come and get it - not some third party I've never heard of!

"john boyle" wrote

I'd say it would be careless to leave lots of cash lying around in your cheque a/c (unless perhaps you have an offset mortgage). So you will, of course, have transferred said excess over to your savings a/c to attract higher interest, wouldn't you?

"john boyle" wrote

Here you go: :-)

In message , Tim writes

Well you would expect wrong.

Its likely that some of the debts you have now belong to somebody else, your mortgage for example. It happens all the time.

If you want to profit from somebody else's tardiness in presenting a cheque then you do so at your own risk.

Ta!!

In one of my cheque books, that bit says "only". Is that to prevent negotiability?

No, it's not. It's the way banking has been done since before you were born.

The relationship lies in the fact you have issued a cheque and the holder of that cheque has a legal relationship with *you*. It is not for nothing that banks always used to stress that you must not issue cheques that may be dishonoured.

Whereas, nowadays they seem to be happier to bill you for £75 of admin charges, fees for letters etc, and interest.

But there is nothing special/abnormal/unusual about this.

You issue a cheque for £2.50 at the hairdressers, they bank at the Ambridge bank of the Borsetshire Bank, who are a small bank who have the National Eastminster Bank do their clearing for them. Of course this can only be possible if they all have title to the bills of exchange (Cheques) which they, for the time being, hold.

DG

Hmm, forgotten those.

Yes, but not transferability (I think)

Agreed. It should be more like the French system. If you are silly enough not to keep your account in funds to cover any cheques you have written, the bouncing cheque is reported to the Banque de France. You then have one month to explain your lapse. If you don't, or if they don't like your explanation, you are banned from holding an account in any French Bank for the next five years.

Colin Bignell

"john boyle" wrote

I'm not talking about "how it works" here, I'm talking about "how it

"john boyle" wrote

Agreed - but the mortgage agreement specifically allows that to happen. If I were not happy with this, then I would not have agreed to the mortgage! If I wrote a cheque payable to 'person X', I would hope that that wouldn't create a debt to another third party - without prior agreement at least.

"john boyle" wrote

So does that extend to not being able to close one's own account at a time of your own choosing, just because of "somebody else's tardiness"??

This was said in uk.legal on Sun, 17 Aug 2003 19:52:39 +0000 (UTC) about Re: Comet not accepting cheques, but we'll make allowances for Tim on this occasion...:

I can't see the original posting on this matter but the majority of cheques are now crossed "Account Payee Only" which means they are effectively not negotiable. No one can gain better title to the cheque than the original payee.

Banks should not accept a cheque (crossed as above) payable to A into an account in the name of B for fear of being liable for conversion.

"derek" wrote

Really? If I am owed 100 from person A, who is also owed 100 from person B - can I walk along to person B and say "give me the 100"? I think not. I would only have a legal relationship with person A, would I not?

So obviously there *is* something "special/abnormal/unusual" about writing the cheque. It must be in the Acts that JB has referred to. Alarming, as I say! :-)

wrote

Does this continue forever? Do you need to leave the money there for that purchase you made by cheque 30, 40+ years ago, but which was not presented for payment?