I foolishly lent someone £50!!!

In message , David Lowndes writes

About what?

I think its historical, going right back to when cheque guarantee cards (or 'Bankers Cards' as they were known) where first introduced when fraud was rare and their issue was regarded as a special thing for special customers only.

By getting the payee to write the cards number on the back was simple and, at the time, sufficiently effective to prevent large scale misuse. Linked to a maximum transaction size of just £30 this was sufficient.

Mail and telephone ordering were specifically excluded and if the drawee was sufficiently suspicious and the transaction would cause an un-authorised overdraft that was of sufficient concern to the bank, then the cheque would be bounced.

It is very unsophisticated, I know, but it was sufficient in its day and is sufficiently effective today.

It doesn't matter why, it's their ball and you play by their rules or you lose.

Jings, all this moaning about £50, I've lost more than that down the back of the sofa.

LOL Exactly.

You should have been with me in the supermarket at lunchtime on Xmas Eve. Place was packed and the woman in front of me was making a big fuss about a "10p off" voucher. The checkout girl had to call for a supervisor to assist. I bought it off her for 20p and got a round of applause from the queue. Sometimes life is just too short.

john boyle reminisced:

Those were the days...

I can just picture you slumped in your armchair, eyes glazed over, varifocals discarded for the moment, a glass of something in one hand, a Captain Beefheart sleeve in the other, thinking what the world has come to.

Cor, that must be going back a bit, when the banks understood the concept even of a customer, never mind a special customer.

LOL, what was the reaction of the lady?

In message , Ronald Raygun writes

Are you watching on my webcam?

Yes it does, I want to know :)

There's usually a good reason behind most such rules, often based on long standing practices that have stood the test of time - I just can't see what it might be in this situation. It seems a very weak and flawed requirement to me - certainly not one that common sense tells you works to prevent fraud.

I wasn't concerned about the amount, just the principal of why it matters who writes a number on, and why it doesn't particularly matter that the number is right or wrong.

Dave

In message , David Lowndes writes

But, in fact, it does work. It needs both drawer and payee to be in league. Cheque card fraud is not the problem it used to be, where theft of cheque books with cards would generally provoke all the cheques being used up within the hour, the introduction of very much improved signature strips together with fewer people carrying round cheque books means this type of fraud is decreasing whilst straightforward card only fraud has increased.

So, the remaining risk is when the account holder wants to enforce the bank to honour his cheques, and that isnt really much of a risk.

I think that must be obvious isnt it? By getting the payee to write it, and remember the other condition that the payee must see the cheque being signed and the sig must agree with that on the card, this puts responsibility on the payee and his writing on the cheque shows he should have held the card. In my own personal experience I know of cheques that have been paid under the cheque guarantee scheme when the number was written incorrectly on the back, albeit just a slight mistake in the figures, and it was obvious that it was just human error on behalf of the payee and the spirit of the Cheque Guarantee scheme had been followed. In this case there was no doubt that the drawer was genuine and the cheque and card werent nicked. So the drawers account was debited.

But there's no independent proof that any such interaction has taken place. What proof does the bank have that the receiver of the cheque wrote the number and witnessed the signing of the cheque - there's no trusted 3'rd party involved.

No, otherwise I wouldn't have got this embroiled. I'm wishing I'd not asked now ;)

That's fine if that's what happens, but there's no proof that it does happen like that. The cheque could be signed, and posted, the receiver could then phone the person and ask for the number and write it on. The bank would not know, but the presented evidence would still be the same and it'd be difficult to prove what actually happened without a trusted 3'rd party involvement somewhere along the line.

It still seems like nothing but smoke to me.

Dave

In message , David Lowndes writes

It doesnt need any proof of a correct performed transaction. It only comes to light if the account holder has reportred book & card as stolen OR the account holder creates an unauthorised overdraft when he writes the cheque.

I dont think I can make it much plainer.

See above.

guarantee

Simple, the vendor is probably subscribing to a third party cheque guarantee scheme like equifax transax and as long as the customer has writen the card number and name+address on the cheque they will be guarenteed payment upto a set ammount. (the amount will vary depending on their merchant agreement and they will need special permission to accept cheques by mail order).

Peter

I thought so too, and indeed a solicitor friend told me that, but when I actually sued I found that (unlike the USA (the Uniform Commercial Code) and France (the Code commercial)) cheques in England are not "negotiable instruments" IN THE SENSE THAT (caps because some self-styled lawyers do not agree) they are (1) freely negotiable and (2) represent a novation of the underlying contract or debt.

In fact, any defence, however fabricated, false or contrived, of the claim is a defence against the [stopping of payment of] the cheque.

So said the judge, and so it is, in England. I was out £100.

Cheques Act 1992 is not contra. (After 1992, if not before, as of right, cheques had to be negotiated by being deposited in an account of the payee. In fact (as I have argued with my branch of HSBC, sometimes successfully, and with Nationwide, virtually never successfully (except when it was a cheque written in my wife's maiden name by BT for a £6 refund), a bank has the ability to encash a third-party cheque. If it wants to (and presumably if it has recourse). But HSBC refused a $20,000 US dollar cheque (again, made out to spouse) even when I presented the UCC to show that it was fully negotiable.

Middle Temple v Lloyds Bank, Times Law Rep., 8 Feb. 1999

In message , snipped-for-privacy@yahoo.com writes

Quite true, (see my posts passim). But it isnt an English Cheque per se, that causes the problem, it is just that the 19992 Act changes the effect of the 'account payee only' crossing and removes the protection previously afforded to the collecting bank. As a pedantic aside the banks to which you refer are NOT encashing cheques for you, merely collecting them.

This is an interesting case but it doesnt quite prove your point. This case revolved round Lloyds Banks failure to communicate to a foreign collecting correspondent bank the details of the 1992 Act and that the drawee, Child & Co, were not a party to this action and Lloyds involvement was merely as an intermediate party in the collection process.

You can not apply the judgement in the way you seem to be in fact this case specifically refers to domestic banks being assumed to be fully knowledgeable of the 1992 and therefore it is quite correct for HSBC to refuse to collect a third party cheque if it feels fit. It still runs a degree of risk and the protection afforded by the 1957 would not necessarily apply.

There is also a money laundering question regarding third party transactions.

AFAIAA a cheque is merely a restricted kind of Bill of Exchange.

A BoE is defined as:

"An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed period in the future, a sum of money, to the order of a specified person, or to bearer."

A cheque is a BoE payable on demand and drawn on a specified bank.

__ Richard Buttrey Grappenhall, Cheshire, UK __________________________

In message , Richard Buttrey writes

And a Bill of Exchnage, and its sub sets, are Negotiable Instruments.

The relevant case, Honourable Society of the Middle Temple v. Lloyds Bank governs the status of cheques, whatever terminology you care to use. You may well call them "negotiable instruments" relying on outdated definitions, but that won't help you in court when you claim to be a BFP (bona fide purchaser for value, or holder in due course) of a UK cheque, and you want to sue the issuer on it.

The full judgment is at:

In other words: even if they are "negotiable instruments" they aren't negotiable.

Or so the judge in my case ruled. (The cheque was, in fact, payment for damages to my car by the driver of a Polish-registered vehicle. I was no more successful in getting the Polish insurance company to pay (even though I was rear-ended) than I was in collecting on the cheque, written by the English passenger (a well-known actress, BTW) who had hired the driver to move her stuff (although I couldn't prove the employment relationship in court, and she denied it then).)

The problem for non-lawyers (especially those in common-law systems) who would argue issues of law (and definitions such as "negotiable instrument" and "cheque" is that things don't mean what the dictionary

-- or even the law -- says they do. They mean exactly what the House of Lords and the European Court of Justice say they do, nothing more and nothing less, in England at least. So if a "negotiable instrument" isn't in fact negotiable, I as a lawyer run out of words when I try to explain it to a non-lawyer.

And those non-lawyers who argue it among themselves will only confuse each other.

The operative instrument is "stare decisis".

Note that modern legislative drafters (and there are currently 42 of them working in Parliament) try to define words succinctly at the beginning of legislation to tie the hands of the judges. They don't always succeed, and sometimes they insert more doubt and ambiguity than they remove.

I add that in Middle Temple "The cheque was crossed 'not negotiable a/c payee only'". Perhaps an open bearer cheque could be written, or a crossed cheque could be un-crossed. But that virtually never happens. And a cheque can be bounced months after it has been written: in the UK there is no way to make a definitive payment by cheque. You have to use a banker's draft or a wire transfer (BACS or SWIFT). This is reality, and pedantry will not be useful to the person who gets scammed on eBay and only finds out months later that the cheque he deposited was countermanded. (I leave aside the issue of bogus cheques and the whole issue of preferential payments and their recovery in bankruptcy...) Funny how on these ngs the amateurs flame the professionals.