Cheque returned after 13 days

[expresso]

I recently lodged a cheque to my current account, drawn on an account from the same branch. After 14 days the cheque has been returned "refer to drawer" with a cover letter dated day 13, that our account had been debited this amount. Can a cheque be returned after this amount of time assuming there was no fraud etc. I would have felt the cheque was assumed cleared after 3 days. Any info would be appreciated.

 

[Mpsox]

Fraud is irrelevant in the case of a bank bouncing a cheque, the same timeframe applies regardless of the reason. I'm assuming here that the cheque is a € item lodged in an ROI branch of a main clearing bank (eg AIB. BOI, UB etc) and that the cheque was drawn on another ROI bank. Time frame would be as follows

Day 1: Item lodged, processed overnight by the collecting bank
Day 2: cheque sent to the drawing bank who process and debit the item overnight to the drawers account
Day 4: Under the industry rules, drawing bank has until the COB on day 4 to decide to bounce the cheque (most would be done on day 3). Item is sent out that night or the next morning to the collecting bank (most have centralised unpaid units these days so it usually is not sent to the relevant branch), together with a corresponding electronic entry
Day 6: electronic entry and cheque should be received by the collecting bank, they debit the payee overnight so your account shows as being debited on Day 7.



There are additional industry rules which allow, in exceptional circumstances, for this timeframe to be extended, usually this can happen where a cheque has got lost in the course of processing (which given that over a million cheques are processed in Ireland weekly, does happen), but they only apply in exceptional circumstances

Note if the cheque was sent on a collection basis then this timeframe does not apply. Likewise if the cheque is drawn on a building society/credit union or a small bank like KBC or was lodged at a building society or credit union, then the timeframe is usually extended by a day

 

[expresso]

bounced after 10 working days

Thank you for your reply;

The bank in question is an Irish one clearing through BOI Sorting code (90-xx-xx). The cheque that we lodged was drawn by a client in the same branch. Should this transaction not have appeared on a referrals list the following morning and be dealt with then? The dates in question are lodged on June 24th and bounced on July 7th. This is a period of 10 working days. Could this bank return a cheque to one of the main clearing banks after a period of 10 working days? Maybe we should put all our lodgements through an account in one of the main banks!!!! (we have been paid since by the client through an account in another bank)

 

[Mpsox]

Thank you for your reply;

The bank in question is an Irish one clearing through BOI Sorting code (90-xx-xx). The cheque that we lodged was drawn by a client in the same branch. Should this transaction not have appeared on a referrals list the following morning and be dealt with then? The dates in question are lodged on June 24th and bounced on July 7th. This is a period of 10 working days. Could this bank return a cheque to one of the main clearing banks after a period of 10 working days? Maybe we should put all our lodgements through an account in one of the main banks!!!! (we have been paid since by the client through an account in another bank)

In the circumstances outlined above, under agreed industry rules BOI have until COB on June 25th to make the decision to bounce the cheque and your account should have been debited no later then June 29th.

It sounds as if they made a mistake initially in not bouncing the cheque, realise that whoever drew the cheque in the first place does not have funds and are just seeing can they limit their own potential loss. None of the other banks would accept an unpaid from another bank in the timeframe outlined by yourself (assuming it was a normal lodgement).

I suggest you write to BOI, advising them that you are refusing to accept the unpaid as the timeframe is outside the rules laid down by the Irish Paper Clearing Company (IPCC) regarding to cheque processing in Ireland. Ask them to credit your account with immediate effect, including any lost interest or charges levied on your account. Advise them if they fail to do that then you will raise a formal complaint via the banks own internal complaints procedures.

Note if BOI don't credit you back then you will need to follow their complaints procedures before you can take it externally to the Ombudsman