# Bounced Cheque: Bank owe duty of care



## mooney76 (17 Jul 2011)

My brother received a payment to his account, the client didnt inform him it was a cheque. It showed up on his online banking as having been cleared/received i.e 15,000 euro payment received

He released goods, 2-3 days later cheque bounced, payment disappeared. Client is fobbing him off.


Surely he must have some come back.
How can an honest business be left to fall victim to scam artists simply because the bank doesnt highlight that the method of payment is cheque?

I have steered him to a solicitor colleague however any advice appreciated


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## millieforbes (17 Jul 2011)

How on earth could this be the bank's fault? 

"Client didn't inform him it was a cheque", "Client is fobbing him off"

Is he still chasing the client who clearly has defrauded him of 15k worth of goods?


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## mooney76 (17 Jul 2011)

Simple, online transfers, lodgements dont bounce, cheques do.
If companies could recognise the type of payment i.e that it was a cheque they could allow 2-3 days before release of goods.

It is the banks fault as they do recognise that it is a cheque but dont notify the payee. This would not be difficult to do and would save business from scammers


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## bullworth (17 Jul 2011)

millieforbes said:


> How on earth could this be the bank's fault?



The bank led him to believe he had the 15k. Why should the bank tell him there is 15k in his account when there wasn't  or give him 15k just to take it back again?


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## Rudolf289 (18 Jul 2011)

In my Internet Banking facility, I can check how much of my account  is cleared funds and how much is not. Granted, if it shows up in your  account when you have not lodged a cheque to your account yourself, you  are likely to assume it was a transfer to your account, not a cheque.  The lesson in this is possibly to drill down into "Interest" and check  what is "uncleared for interest" when you get a lodgment into your  account. If it does not show up as an item uncleared for interest, I  think you can assume it is cleared funds. 

We all have probably learned a lesson from this post. Best of luck to  Mooney76's brother in trying to recover the 15K. May need to get "heavy"  and "uncompromising"


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## millieforbes (18 Jul 2011)

I can tell the difference between a lodgement and a transfer on my online banking, but maybe this isn't the case with all systems. 

To me this stinks of fraud (rather than just mistiming of cheque or short term cashflow issues) - it sounds like the client wanted the OP's brother to believe there was a bank transfer. Would it not make sense to approach the bank from this point of view first and look for help with the fraud?

I agree that internet banking doesn't appear to distinguish cleared funds from uncleared funds - and this could be an issue for many people. BTW does your brother have business or personal online banking? there may be a difference in the level of detail available


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## mooney76 (18 Jul 2011)

He uses BOI online (business), and i dont think he could distinguish. Maybe he can!
I dont suppose you are using BOI? As an honest wholesaler it wouldnt take many clients like this to shut down his business. Companies that do this should be named, shamed and shot


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## jhegarty (18 Jul 2011)

Report it to garda station.  

Can't remember the correct legal term , but using a bad cheque to obtain goods or services is a type of theft.


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## Brendan Burgess (18 Jul 2011)

Hi mooney

The vast majority of suppliers, including your brother probably, would have released the goods on receipt of the cheque from the supplier. The cheque would have subsequently bounced anyway. So it's not really any different. 

_If _it's your brother's policy not to release goods until he has cleared funds, then it should also be his policy to check that any payment made directly to the bank was cleared funds.

Having said all that, if I saw money appearing in my bank account from a supplier, I would assume it was a bank transfer and, as such, cleared funds.

If this is a frequent problem for the banks, they should develop a system to show the balance of cleared funds on online banking. 

The supplier, not the bank, has scammed your brother. He needs to try to recover the goods supplied or the payment for them. 

Brendan


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## mooney76 (18 Jul 2011)

It's quite incredible really,
He is quite sure goods have been sold on so little to recover.

The banks know when they are handed a cheque so they could prevent this happening. I spoke to someone else over the weekend who had experienced the same.

The main issue here is that the bank show the cheque as cleared/lodged and
A. Don't notify it's a cheque
B. Show funds one day and when the cheque bounces 2
   days later remove giving the impression in the first
    Instance that it cleared


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## Jim2007 (18 Jul 2011)

mooney76 said:


> It's quite incredible really,
> He is quite sure goods have been sold on so little to recover.
> 
> The banks know when they are handed a cheque so they could prevent this happening. I spoke to someone else over the weekend who had experienced the same.
> ...



I think the most important thing here is to look at the terms and conditions of using this account.  I fully expect that you'll find that the bank is in compliance with these terms and that you are wasting time and money going after the bank.

You need to go after the customer as quickly as possible, report it to the Garda as it's fraud, plain and simple.  The fact that the customer would lodge a cheque of his own to the account should be enough to raise the Garda interest in it.

Good luck with that,

Jim.


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## mooney76 (18 Jul 2011)

Thanks jim, I wouldn't hold out on the bank being accountable to him, just that they should highlight what lodgements are cheques, simple to do.

I have just spoken with him and he has been told again this morning that the customer is saying the bank have lost the payment and they say it will land in his account by 2pm as again he has spoken with his bank manager. Not the first time he has been told this.

I told him to ask him for the branch managers number to confirm this with him which the client seems to think is crazy. He has now said that he will ask the bank manager to call him this morning. I haven't heard if he called him yet but assume it's more rubbish


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## millieforbes (18 Jul 2011)

Has he checked with his own bank on the lodgement and reversal?


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## Jim2007 (18 Jul 2011)

mooney76 said:


> Thanks jim, I wouldn't hold out on the bank being accountable to him, just that they should highlight what lodgements are cheques, simple to do.
> 
> I have just spoken with him and he has been told again this morning that the customer is saying the bank have lost the payment and they say it will land in his account by 2pm as again he has spoken with his bank manager. Not the first time he has been told this.
> 
> I told him to ask him for the branch managers number to confirm this with him which the client seems to think is crazy. He has now said that he will ask the bank manager to call him this morning. I haven't heard if he called him yet but assume it's more rubbish



What the customer or his bank manager are saying makes no difference, because your friend's bank is not going to give them any details about his account, so telling your friend that the money will be on his account at a certain time is a lot of nonsense!

The bit I don't get is how the cheque is involved... the normal thing is for a customer to write a cheque and give it to the seller who in turn lodges it with is bank.  So who lodged the cheque in this case?

If I was your friend I would set a date for cleared funds to be on your account and tell the customer that if it does not happen he will be reported to the Garda.  Thereafter, enter in to further discussions with him, because doing so just drags the thing out.  Then on the given date, if the funds are not there just go ahead and make the complaint to the Garda.

Jim.


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## Brendan Burgess (18 Jul 2011)

The customer obviously lodged the cheque to the account. 

However, if a cheque was lodged and it bounced, the cheque should have been returned to your brother.

If this did not happen, then there is another possibility...

His bank transferred the money into your account. 

They subsequently took it back, which they are not allowed to do. 

Did your brother get the bounced cheque sent to him by the bank?

Brendan


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