• By: NIGEL THOMAS

  3360

  
  There are times when the opening of a bank statement is cry-worthy. You’ve done it again! Bounced that check you wrote for the new digi-box. As if that wasn’t enough to make you put your head in your hands, the bank has charged you because of it all. It’s the second time of recent, so that credit rating of yours is likely to be getting some of the black taken off it.

  The initial feeling of someone conspiring against you is often a misguided one when it comes to the bouncing of a cheque. It’s often more to do with the indistinctness of the cheque clearing system.

  How Cheque Clearing Works

  It is key to remember that cheque clearing is done solely via computer. An account receives a cheque, and in order for it to be honoured, the bank in receipt has to contact the bank of the issuer, to see if they will. If the bank agrees that the funds are indeed sufficient, then the cheque clears. All carried out by computers.

  Exemplary to this, is the story of Mr Morris and Mrs Unwin. Mrs Unwin pays a cheque from Mr Morris into her account. In the assumption that the money is now in her account, Mrs Unwin now writes a cheque for her cat’s veterinary bill. Without knowing that Mr Morris does not have money in his account for the cheque to clear. Therefore, when Mrs Unwin’s bank tries to get money from Mr Morris’ bank, both cheques bounce.

  Cheques can take anything between 3 and 7 working days to clear, and this amount of time is indicative of various factors. Factors such as:

  1. The day of the week when the cheque was paid in. One paid in on a non-compliant banking day, like a Saturday, will likely take longer than one paid in on a normal day, such as a weekday.

  2. The fastest clearing cheques are the ones that are drawn and received by the same bank. It is worth noting that building societies are known to take more time.

  3. The currency of the cheques.

  Clearing Foreign Currency Cheques

  It is considered the norm, for cheques from a foreign bank to take longer to clear. Some banks will treat certain currencies with normality though. Dollars are a good example here. The cheque will be assumed to clear, and the bank will credit your account, non-inclusive of any charges levied for foreign transaction fees.

  Other banks have a propensity for caution though, and will drag out the whole process. They will take anything up to 6 weeks, due to the fact that the cheque has to go through 2 banking systems.

  Avoiding Charges For Bounced Cheques Your bank account deserves respect and so therefore should be treated with awareness. Check your account balance regularly, and make notes of specific dates where you are going to be having monies going out for direct debits and standing orders. You may well have more money going out than you are aware of. It is always wise to check your statements. You can also telephone or email your bank for information.

  This article is written by Jonathan L Walker, on behalf of Claims Management UK, specialising in helping people with their Reclaim Bank Charges

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