Known Scam?

[Xerxes]

BS: In this case its the BANK who pays - they can't just claw back value of cheque cleared months ago. Prove otherwise by providing links to reputable sources that talk about stories of this happening.

I don't know you very well, or indeed at all, but are you normally this rude and aggressive? I know bulletin boards allow social inadequates to posture, but let's all try and be nice, heh?

As I told you, I used to work in the clearance department of a global bank. I was also the bank's IT representative to APACS, the body that oversees the UK clearance system. Do you also think that it's credit card companies that pick up the bill when fraud is committed?

Even the most cursory search of the net will reveal what I say to be true. Why not have a read of this article from the BBC's "Money Box" programme:

Avoid using cheques, says Apacs

To save you the trouble, here are a few choice quotes:

Bank customers have been advised to avoid accepting cheques after it emerged that many are cancelled long after people think the money is safe for them to spend.

...if problems are noticed later in the clearing process banks are still cancelling the payments leaving customers angry and frustrated.

Abbey... said the actual time for a cheque to clear can now vary between two days and six months. And in extreme cases Abbey said it can take even longer.

Nat West [said] cheque payments will never be guaranteed and can always be cancelled later.

...the clearing banks who process cheques, each confirmed they will never guarantee that seemingly cleared cheques will not be declared void much later.

Sandra Quinn, Director of Apacs, the organisation which runs the cheque clearing process for banks, said they [the banks] must do everything they can to protect themselves and their customers' money.

I forgive you for your rudeness so why not apologise so we can kiss and make up?

[expat]

I forgive you for your rudeness so why not apologise so we can kiss and make up?

I admire what you're attempting to do here and I wish you the very best of luck.

[Xerxes]

I admire what you're attempting to do here and I wish you the very best of luck.

Never hold a grudge say I, and I try and make sure the same applies to others too.

[jason986]

Xerxes

Look at it the other way around. Suppose you go on holiday for a month, come back and find some naughty person has fraudulently written a cheque drawn on your account. You might not notice this for another month, or maybe even a quarter if you have quarterly statements and no on-line banking. How would you feel if you call up your bank and they say, "sorry, chum, the cheque's cleared, there's nothing we can do"?

I also used to work in a clearing center a long time ago.... and whilst agree with what you have said about uncleared cheques in general, I do understand that the above example would not be the fault or responsibility of the account holder unless the cheque that was stolen had their signature on. It was the banks responsibility to check that the signature is genuine - it used to be that all cheques over £1500 had there signatures checked before clearing but I'm not sure if this is still the case?

[Xerxes]

Xerxes

I also used to work in a clearing center a long time ago.... and whilst agree with what you have said about uncleared cheques in general, I do understand that the above example would not be the fault or responsibility of the account holder unless the cheque that was stolen had their signature on. It was the banks responsibility to check that the signature is genuine - it used to be that all cheques over £1500 had there signatures checked before clearing but I'm not sure if this is still the case?

Quite, which is why the bank takes the money off the person who presents the cheque and returns it to the person who (ostensibly) issued the cheque. This is what happens regardless of how much time has elapsed and whether the cheque has been "cleared" or not.

It has been quite a while since signatures on high value cheques were checked as a matter of course. This only happens now in cases were fraud is actively suspected.

[AtW]

Do you also think that it's credit card companies that pick up the bill when fraud is committed?

Yes of course its credit companies that pick up the bill - if someone steals money by cloning my credit card then I won't be liable - of course these costs will be passed onto consumers, but they will not hit just the person who was defrauded.


You do appear to be right about cheques however - I do apologise.

[Scaroth of the Jagaroth]

So who does picks up the bill then? The retailer I suppose?

[Xerxes]

Yes of course its credit companies that pick up the bill - if someone steals money by cloning my credit card then I won't be liable - of course these costs will be passed onto consumers, but they will not hit just the person who was defrauded.

You do appear to be right about cheques however - I do apologise.

I accept your most gracious apology, it's nice to know we're all friends again.

As to credit card companies, I'm afraid not. It is the retailer who accepted the card who picks up the bill. When you dispute a transaction, the amount is debited automatically from the retailer's account and a claw back fee (typically GBP 40) applied. This is the case even if the retailer suspected something dodgy and phoned the card company for manual authorisation and it was given.

This is the real reason why UK card companies dragged their heels over chip and PIN. Although they would never admit it, fraud is highly profitable for them, the retailer fines far outweighing the odd occasion when they have to take the hit themselves. The only time the poor schmuck at the end of the chain (the person who accepted the cheque or the retailer who accepted the card) doesn't pick up the bill is if they've disappeared or gone bust.

These financial institutions ain't charities and they don't generate that sort of profit by accepting the risk themselves.

[Rebecca Loos]

So guys, since you have worked in clearing systems, is there any form of payment that's 100% secure, so if I receive a payment, I can be 100% sure that this money is mine and will not be "clawed back" by the bank?

Apart from cash obviously.

Like the BACS payments made to me by an umbrella company, or a client: are they 100% mine once they hit my account?

Any other forms that are 100% safe?

[BoredBloke]

So what is to stop somebody opening an account with a false identity and never closing it - Simply leave it open!