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OFT introduce clarification on the banking industry's cheque cycle
Just had an email from my bank which basically reads:
Quote:
With effect from 3rd December 2007, the Office of Fair Trading (OFT)
will introduce a new 'customer promise' that aims to clarify the banking
industry's cheque clearing cycle.
The OFT 'customer promise'
In summary the OFT 'customer promise' will clarify:
- when you will start to earn interest on a cheque deposit
- when you can withdraw against the cheque deposit, and;
- when a cheque can no longer be debited from your account without
your permission (cheque clearance in this instance known as 'certainty
of fate').
The maximum cheque processing timescales set out by the OFT 'customer
promise' are as follows:
T = Transaction day:
The day a cheque deposit will appear as a credit on your account
T+2 = Transaction day plus 2 clearing days:
The day you will start to earn interest on a cheque deposit. Or, the
day the value of the cheque deposit will start to reduce the interest
charged on your overdraft.
T+4 = Transaction day plus 4 clearing days:
The day you can withdraw against the cheque deposit in your current
account. (Until 'certainty of fate' is reached a cheque can still be
returned unpaid and the deposit removed from your account).
T+6 = Transaction day plus 6 clearing days:
The day you can withdraw against the cheque deposit in your savings
account.
T+6 = Transaction day plus 6 clearing days:
The last day the cheque deposit can be debited from your account
without your permission. After this day you will have 'certainty of fate'.
Please note: Clearing days are equivalent to business working days and
do not include weekends or bank holidays: example - if T is Monday
then T+2 is Wednesday, or if T is Friday then T+2 is Tuesday. There may
be limited circumstances beyond our control, where payment or non
payment of a credited cheque may be delayed or not presented. For example -
if the cheque is involved in a fraudulent situation.
Now I'm a bit confused as to exactly what this means for customers. For example:- T+6 = Transaction day plus 6 clearing days:
The last day the cheque deposit can be debited from your account
without your permission. After this day you will have 'certainty of fate'.
So I've always been of the impression that 3 or 4 business days is the rough time a cheque will clear and be debited or credited against an account.
Are the OFT doing favours here for the banks or to customers? I can't tell. Seems to me it's bordering on the banks side as it's giving them additional time to do their clearing.
Anyone who works within a bank care to clear up whether this is any different to what has always been the case, or what this really means for customers.
Also should I be alarmed by the phrase "certainty of fate"? It sounds like it could be the name of one of the cousins of the four horsemen of the apocalypse.
Cheers.
11-26-2007, 07:37 PM
OFT introduce clarification on the banking industry's cheque cycle Post #2
Originally posted by Cobbler:
People still use cheques?
I stil get paid weekly by cheque (when no cash is avaliable ) but i do work for guy who was a farmer for over 40 years, he doesn`t do modern technology, if it can`t be sorted with a shovel, it won`t get sorted
OFT introduce clarification on the banking industry's cheque cycle 
) but i do work for guy who was a farmer for over 40 years, he doesn`t do modern technology, if it can`t be sorted with a shovel, it won`t get sorted 
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