# Cheque gaurantee cards



## bond-007 (11 Jun 2005)

Are there any circumstances where a bank can bounce a cheque with a valid cheque gaurantee number on the bank? I was under the impression they must honour all cheques provided a valid card number and expirty date is written on  the back?

Thanks for your help and insight.

007


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## ClubMan (11 Jun 2005)

Well, they could presumably bounce the cheque if there are insufficient funds or an insufficient overdraft facility available in order to honour the cheque. Or if the cheque was incorrectly written perhaps. I've never heard of anybody writing the cheque guarantee card details on the back of the cheque. If the card was a combined card (e.g. cheque guarantee and _ATM _or _Laser _card) then allowing somebody to transcribe these details might be a bit of a security lapse.


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## CCOVICH (11 Jun 2005)

The bank is generally 'authorised but not obliged' to honour a cheque that would result in the customer running an unauthorised overdraft position.

Note that it is not possible for the customer (drawer) to stop, countermand (cancel or recall) or post date a cheque that was written in conjunction with the cheque guarantee card. (I don't know if this is standard accross all Irish retail banks, but I would presume that it is)


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## ClubMan (11 Jun 2005)

I've never really understood the point of cheque guarantee cards to be honest and in all the years that I've had one I have never once used it when paying by cheque.


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## bond-007 (11 Jun 2005)

Lots of places insist of them, Dunnes, Tesco all petrol and garages etc. Its their way of ensuring the cheque won't hop.


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## RainyDay (12 Jun 2005)

ClubMan said:
			
		

> Well, they could presumably bounce the cheque if there are insufficient funds or an insufficient overdraft facility available in order to honour the cheque.


I'm 99% sure this isn't the case. The whole point of the the cheque guarantee card is to guarantee payment to the payee up to the limit of the cheque card (used to be IR£200). I can't think of any reason why the bank would bounce the cheque, unless they suspected some kind of fraud was involved. I had kind-of forgotton about cheque guarantee cards - Do standard ATM cards still double as cheque guarantee cards?


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## bond-007 (12 Jun 2005)

Only laser cards double as Cheque cards.


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## ClubMan (12 Jun 2005)

It doesn't make sense to me that a cheque guarantee card would necessarily guarantee the payment of cheques even if there are insufficient funds to cover them. If I have no money in my account and no overdraft facility and I write a complete book of cheques then I am sure that the bank will not cover them and some or all of them will bounce. Some _ATM _cards are also cheque guarantee card. A cheque guarantee card carries the cheque guarantee logo.


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## RainyDay (12 Jun 2005)

Yep - this was the whole purpose of the guarantee. And yes, you could spin through an entire cheque book up to the (relatively low) limit per cheque, though there was some restriction about not using multiple cheques as part of a single transaction. Without the guarantee, the retailer had little comfort that the cheque would be 'good'.


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## ClubMan (12 Jun 2005)

The standard cheque guarantee amount is €130 as far as I know (used to be IR£100). Chequebooks often contain 25 cheques. As far as I know my bank (_PTSB_) will be issuing books of 50 as standard real soon now. You are saying that I could write, say, 25 x €130 = €3,250 in cheques (to different retailers) and have them paid even if I had no money in my account? Seems unlikely to me that this would work in practice. The guarantee of payment offered by a cheque guarantee card seems to be subject to some terms & conditions but I can't seem to find what these are.


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## bond-007 (12 Jun 2005)

I know someone who wrote out a book of 40x€130 cheques with no money to back them up. The bank begrudingly paid them. The bank had kittens when the cheques hit the bank. He wrote them out to his friends who gave him the cash and he used the €5K obtained to leg it to Australia.


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## ClubMan (12 Jun 2005)

How does a bank know/check that the cheque guarantee card was presented to the payee at the time that the cheque was handed over?


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## bond-007 (12 Jun 2005)

So long as the card number and expiry date is written on the back of the cheque that is enough. The receiver is supposed to take the card and copy down the info.


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## RainyDay (12 Jun 2005)

Note that [broken link removed] defines the cheque card (aka cheque guarantee card) as follows;



> *Cheque Card*
> Account holders use it as proof of identity, and as a guarantee the bank will honour the cheque. When a person accepts a cheque, the signature on the cheque should be compared with the one on the card. It should be an up-to-date card and the card number should be written on the back of the cheque.


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## ClubMan (12 Jun 2005)

RainyDay said:
			
		

> and the card number should be written on the back of the cheque.



Right - I didn't know that this was the way it worked. Come to think of it I'm not sure that I have ever used my cheque guarantee card when presenting a cheque (not that I do this that often these days, other than when mailing them, what with the availability of alternative methods of payment, in particular _Laser _and credit card).


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## demoivre (13 Jun 2005)

Just received my new Maestro debit card from AIB which replaces the laser/cheque guarantee card and the ATM card. On page 2 of the explanatory leaflet it specifically says "The card guarantees a cheque, to the value of € 130 ".
I take that to mean just that , AIB will pay up even if I have no funds in my account, provided the cheque doesn't exceed  €130 .


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## MonsieurBond (13 Jun 2005)

*Re: cheque guarantee cards*



			
				demoivre said:
			
		

> Just received my new Maestro debit card from AIB which replaces the laser/cheque guarantee card and the ATM card. On page 2 of the explanatory leaflet it specifically says "The card guarantees a cheque, to the value of € 130 ".
> I take that to mean just that , AIB will pay up even if I have no funds in my account, provided the cheque doesn't exceed €130 .



Cheque guarantee cards guarantee the merchant up to the value of the guarantee, e.g. €130 (£100).

However, this guarantee only applies to the FIRST bounced cheque you write. If a cheque bounces, my understanding is that the merchant can apply for his money from the bank. Once the bank pays this - thus honouring the chq guarantee - the guarantee is immediately null and void for future transactions. I think you (as the customer) are even supposed to return the card!

So, if you wrote 10 chqs for €50, only the FIRST chq for fifty would be honoured by the guarantee, if a merchant claimed on it.

If you write a chq for much more than €130, say for a grand, the €130 guarantee is not much use to the retailer.

This is one reason why the govt was supposed to be pushing e-money (Laser card, credit cards, etc.), which they were doing until they increased the stamp duty on cards to anti-competition and anti-consumer levels.


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## MonsieurBond (13 Jun 2005)

I see that the [broken link removed] site says:



> Cheque
> 
> A written intruction from you to your bank it [sic] to pay a stated sum of money from your account to a person named on the cheque or occasionally to yourself. If there is not enough money in your account the bank may not honour the cheque (it bounces).
> 
> There is a guarantee, however, to pay a minimum of €130 if the person accepting the cheque has also been shown a cheque guarantee card by you.



I wonder do they mean _maximum _instead of _minimum_?


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## demoivre (13 Jun 2005)

I note in one of the T&C's that it says " You may not use the card:- to create an unauthorised overdraft on the account or extend an overdraft beyond an approved limit "

This contradicts what they say in the leaflet that I mentioned above.


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## CCOVICH (13 Jun 2005)

demoivre said:
			
		

> I note in one of the T&C's that it says " You may not use the card:- to create an unauthorised overdraft on the account or extend an overdraft beyond an approved limit "
> 
> This contradicts what they say in the leaflet that I mentioned above.


 
Yes I noticed this apparently contradictory position myself when doing a bit of reading last week.
I think this is to discourage people from using the card to run up unauthorised excesses (they have not done a credit check to see if you are suitable for an overdraft).

As I posted earlier, the bank is 'authorised but not obliged' to honour checks that create unauthorised positions.


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## CCOVICH (13 Jun 2005)

MonsieurBond said:
			
		

> I see that the [broken link removed] site says:
> 
> 
> 
> I wonder do they mean _maximum _instead of _minimum_?


 
I just talked to somone 'in the know' on retail banking, and apparently the bank must honour every cheque written with a cheque guarantee card, unless they can repossess the chequebook and card, so it is possible to write 25/50 cheques for €130 each and the bank will have to honour them all.  Obviously, this is not explicitly stated in the ts&cs, as it would lead to people abusing this:

_I know someone who wrote out a book of 40x€130 cheques with no money to back them up. The bank begrudingly paid them. The bank had kittens when the cheques hit the bank. He wrote them out to his friends who gave him the cash and he used the €5K obtained to leg it to Australia._

MB-I would say that IFSRA do mean _minimum_, as the bank could choose to honour more than €130, but have no obligation to do so.


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## Bank Manager (13 Jun 2005)

If valid cheque guarantee card is used bank is obliged to pay cheque from customers account (irrespective of whether there are funds in account or not) - on cheques up to value of E130.  Writing a cheque guarantee card on the back of a cheque for an amount greater than this is in effect useless.

Cheque Guarantee Card is written on back of cheque,  Bank compares same to their records.  If in order cheque must be paid.  Obviously must be within expirey date etc.

Yes - does create credit exposure risk for Bank, hence why they won't (or at least shouldn't) hand out until they've satisfied themselves as best they can on customers credit worthiness.

Only instances they can bounce cheque would be.....

a) fraud - and signature on cheque bears no resemblance to that on cheque guarantee card (therefore retailer did not carry out necessary checks)

b) card out of date - again retalier deemed not to have carried out appropriate checks.

c) if card is placed on 'abuse' list, which is circulated to retailers, and retailer cashed after same was circulated on this list.

In reality, used less and less in todays environment as more people are using Laser/Credit Cards, and the limit of E130 has not increased in line with inflation, thus limiting it's usefullness.


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## Oracle24 (6 Feb 2009)

Bank Manager said:


> If valid cheque guarantee card is used bank is obliged to pay cheque from customers account (irrespective of whether there are funds in account or not) - on cheques up to value of E130.  Writing a cheque guarantee card on the back of a cheque for an amount greater than this is in effect useless.
> 
> Cheque Guarantee Card is written on back of cheque,  Bank compares same to their records.  If in order cheque must be paid.  Obviously must be within expirey date etc.
> 
> ...



Is the above still valid? Am trying to ban the acceptance of cheques in my company but am under pressure to accept cheques to a value max value of €130 if a guarantee card is presented. Is is just a case of wrting the details of the card on the back of the cheque?


Thanks


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## TarfHead (6 Feb 2009)

I have always believed the following to be true ..

.. a card number, written on the back of the cheque, can be invalid if written by the person offering the cheque in payment, i.e. it's the responsibility of the person accepting the cheque to write the cheque number.

Not covered in what's cited below ? Can anyone confirm, or refute, this ?


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## Perplexed (7 Feb 2009)

BM's post is still valid. Yes, it's the responsibility of the receiver of the chq to write Card no & check that all details are correct.

Why does anyone want to deal in chqs these days ? They're costly, inefficient etc. The only reason I would see for writing a chq is when it has to be posted!

Laser is a much better option.


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## nlgbbbblth (7 Feb 2009)

Laser requires funds to be in the account at the time of the transaction.

Paying by cheque and guarantee card does not.


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## bond-007 (7 Feb 2009)

CGC's are virtually a thing of the past now. Laser is king now.


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## nlgbbbblth (7 Feb 2009)

yes but the laser card has the CG symbol. So paying by cheque in that manner can still be done. If the transaction takes place at the right time you can buy yourself four or five days credit.


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## TarfHead (8 Feb 2009)

bond-007 said:


> CGC's are virtually a thing of the past now. Laser is king now.


 
My GP doesn't take plastic, and then takes months to lodge the cheques.

My childcare provider doesn't take plastic.

Tradesmen don't take plastic.

These are the main reasons why I continue to need cheques


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## bond-007 (9 Feb 2009)

Very few of them would bother with CGCs.


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