h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Entry: Cheque Clearing loophole - A1913267
Author: Gag Halfrunt - U34209

Whatcha think, just a short one, and it could to with some info on clearing times

some things to factor in to your cash flow management....

1. it is possible for businesses to specially clear cheques - they pay a bit more, but means it comes out of your account faster
2. if it bounces, just the once, it means you will incur banking charges. This is not just for that ONE transaction, as often banks will charge you for the entire quarter within which you went overdrawn. Ouch.
3. clearance times also vary with different banks - eg if the payee banks at the same bank as you, it will be quicker than if they are at a different bank. If they (ulp) bank at the same branch as you...then it will be immediate on presentment.
4. I have worked in businesses where they have several different bank accounts accross the city, and pay received cheques into those accounts which they know will clear the fastest. (Mr Small, the greengrocer might not do this, but larger outfits might)
5. if your bank gets whiff of it then you might find yourself without a chequebook at all!!

I think it might be a criminal offence to write a cheque knowing that there is no cash in your account - although it might only be an offence if you know that it's going to bounce...

criminal offence?

might be - eg if there is an intent to defraud or something - I'm not a criminal lawyer, so who knows (although I am in fact, actually a lawyer) so there might be some specific law relating to cheques (probably is, but I can't be arzed looking it up)

could look at it this way -

1. you have hopefully used a cheque guarantee card (unless the bank has taken it away from you) so the person you wrote the cheque to is not out of pocket

2. you have however, likely breached contract with your own bank - but that is civil matter (ie you call be called to task for it by the bank, and made to pay up), but breach of contract is itself, not a criminal offence

of course, this posting is not intended to encourage this kind of thing - but what the heck, its only a discussion

ps - this is talking about UK law - no other country - cause I don;t know how they would look at these things...

Right... thanks everyone... I think I'll do some more research before posting this, lest the safeway PLC. goon squad comes smashing through my window.