Changes made to cheque deposits
January 14, 2008
Following a change in regulations consumers that make cheque deposits into their bank accounts will now be able to enjoy increased speed and efficiency, as well as other benefits. The new rules, put together by the Cheque and Credit Clearing Company along with APACS, will come into force at the end of November. The Office of Fair Trading has been trying to get clarification on cheque clearance times for years from the banking industry.
A recent survey carried out by the Cheque and Credit Clearing Company showed that under a quarter of those surveyed actually knew the correct time for a cheque to clear. The results also showed that over 50% of those surveyed were concerned about accepting cheque payments for fear that the cheque could bounce and they would lose the money. In the past a cheque that bounced or was found to be fraudulent meant that banks could take the money from the account of the person to who the cheque was paid even if the problem occurred weeks or month later.
Under the new regulations banks will have to start paying interest on cheque deposits after two days. After four days the accountholder will be able to draw money from the cheque deposit. After six days the money will belong to the accountholder regardless of whether the cheque bounces or there is any other similar problem. All FSA registered banks and building societies will have to adhere to the new regulations.
An official from APACS stated: ‘Although cheque use has fallen over the last few years, cheques remain important for certain customers in certain situations. Whether it’s a small business or someone selling a car, there are many occasions where cheques still get handed over. These changes will really benefit anyone paying in a cheque, offering them certainty and clarity on when the money has cleared and giving real peace of mind.’
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