After years an years of banging on at the powers that be about how ridiculous it is that a cheque should take so long to process in the current climate of communications technology, they've finally listened and changed the process to make it take.... LONGER?!

ARE YOU FRIGGING KIDDING ME?

Not only have they made it take even longer than the unnecessary amount of time it used to take, they've added a layer of uncertainty as to when the funds are actually transferred.

Are the Axis of Evil Comedy tour right? Have terrorists spiked the water supply with heroin?

It should be added that if the cheque proves to be fraudulent, then the money can be recovered up to 6 months later IIRC.

I think that the spin on this article is slightly misleading. The point about this initiative is that cheques will be guaranteed to be cleared by day 7. Under the old system there was no guarantee at all; it could (in unusual circumstances) take months for a cheque to fully clear despite it appearing as a credit in the payee's bank account, and the payee was at risk the whole time. This uncertainty about cheque clearance, especially for overseas cheques, was the basis for the overpayment fraud, where a fraudulent buyer would present a cheque larger than the amount of the transaction, with some suitable justification, and request repayment of the balance. Of course, the payment would appear in the payees bank account after 2-3 days under the normal routine, but when the cheque bounced several days (or even weeks) later, the payee would be out of pocket. Now all a payee has to do is wait till day 7, and he or she can be assured that the payment is good.

I guess the IT angle is that this kind of fraud is a variant of phishing!

In the name of anti-fraud, anti-terrorism, <insert quest here>. The cynic in me would suggest that the bank(s) just like having the dosh in transit for that bit longer. Especially given that cheques are arguably in declining use nowadays.

Who still uses these old fashioned things?

Decades late and missing a much bigger scam.

That of online money transfers.

How on earth the banks can justify 2-3 days wait (and lost interest to the customer) for an electronic transfer of money is beyond me. I suspect it might have something to do with that interest being a nice little earner for the banks, cumulatively speaking.

I want that money showing up at the recipient's end within 2-3 hours. I know it's not the same thing, but PayPal can manage instant transfers, so I expect the same thing from the banks.

Step to it guys...

One of my big beefs with the UK banks - in India, all local cheques are cleared within *one* working day (outstation cheques take a while longer owing to the fact that not all banks are connected up at a central clearinghouse).

Fine - let cheques take 7 working days. But why does an "on-line transfer" take 3 working days?

Reminds me of the film "Swingers":

Mike: So how long do I wait to call?

Trent: A day.

Mike: Tomorrow.

Sue: Tomorrow, then a day.

Trent: Yeah.

Mike: So two days?

Trent: Yeah, I guess you could call it that, two days.

Sue: Definitely, two days is like industry standard.

Trent: You know I used to wait two days to call anybody, but now it's like everyone in town waits two days. So I think three days is kind of money. What do you think?

Sue: Yeah, but two's enough not to look anxious.

Trent: But I think three days is kind of money. You know because you...

Mike: Yeah, but you know what, maybe I'll wait 3 weeks. How's that? And tell her I was cleaning out my wallet and I just happened to run into her number.

Charles: Then ask her where you met her.

Mike: Yeah, I'll ask her where I met her. I don't remember. What does she look like? And then I'll asked if we fucked. Is that... would that be... T, would that be the money?

Trent: You know what. Ha ha ha Mike, laugh all you want but if you call too soon you might scare off a nice baby who's ready to party.

Mike: Well how long are you guys gonna wait to call your babies?

Trent, Sue: Six days.

Yet another excuse by the banks to force people to use plastic for transactions!

QUOTE - After years an years of banging on at the powers that be about how ridiculous it is that a cheque should take so long to process in the current climate of communications technology, they've finally listened and changed the process to make it take.... LONGER?! /Quote

There are many dozens of different banks and building societies, but there are only 4 (I believe) clearing banks. ALL cheques are sent through a clearing bank and this is why it was always been at least 7 days to clear a cheque (less if you actually bank with a clearing bank). Typically they tell you it's 5 days, but they mean 5 working days from midnight the day you deposit the cheque. So deposit a cheque on Monday, and it won't clear properly until the following Monday anyway.

So there is no real change in the time taken to clear a cheque, the real change is in the guarantee that the money is cleared fully.

So it is progress, albeit a little on the late side, the use of cheques is in severe decline... I've been using the same cheque book for 3yrs and still have some left. Most of the cheques have been used to pay for pizza when I've been short of cash and too drunk to get to a cash point. :)

I can buy a computer on line in seconds, which century are the banks living in tat a cheque takes so long to clear?

I can take cash out in France, from a German account without charge and see that it's gone from my account immediately.

I can book a train ticket in a few seconds. I'm not told well you've got a sort of ticket, errrr, ummmm, we'll only know if it's valid in seven days time.

Someone needs to give the banks a kick up the bakside!

and its really strange that the money goes from the other account on day 1 isnt it... ah well 'the golden days of free banking' </sarcasm>

Mis-spellings aside - there's still absolutely no reason why the process cannot be shortened. Submit / Scan / Transmit / Auth / Confirm. There's about as much reason for delaying the process 4 days as there would be having to request ATM cash 4 days in advance just because you're in a different country.

Excuse the rather random comparison, but I can't come up with anything better in 30 seconds.

"One of my big beefs with the UK banks - in India, all local cheques are cleared within *one* working day"

I live in Mexico. Any cheque, from any bank, to *any* other bank in the entire country is credited within one working day too. Actually, new regulations made it that other-bank cheques will be credited after 12pm, so now the process is relatively slower than before. It used to be 9am or later. ;)

Electronic transfers come in two variants: TEF (spanish for Electronic Transfer Fund EFT) which is next-day, much like cheques; and SPEI which is 1-2 *hours* same-day. Of course, SPEI has a cost, TEF is (usually) free of charge.

As for cheque clearance, its easy: cheques not yet cleared appear as "SBC" (salvo buen cobro / on good payment), cleared ones add up to your actual balance. I was amazed when my dad said that in the US checks usually take 4+ days to clear. Eek!!

Before this I believe the 'safe time' was around 14 days in case of a counterfeit cheque from a UK bank, however as I understand it there was no guarantee and you could still loose all the cash if something came up in the future.

Lloyds will clear most checks in one working day, but the accounts have monthly fees, probably in line with NZ.