Cost Of Non Paid Cheques & Reclaim Bank Charges - By: Jonathan Walker - Big Blue Tomato

There are times when you feel as though the fright of a bank statement is going to kill you on the spot. Times when it isn’t just a case of bouncing that cheque that was written for your utility bill, but the added cost of what the bank has charged you as well. If this is not the first time this has happened then you may well be waving goodbye to your good credit rating.

When cheques do bounce though, it’s not always due to the Machiavellian function of another. It’s often down to the obscurities of the cheque clearing system.

How Cheque Clearing Works

This is how the clearing of cheques functions. A cheque gets paid into an account. The bank in receipt of that cheque, contacts the issuing bank to see if it is going to honour the cheque. If the response is of a positive nature, then the cheque gets cleared. If it is of a negative nature, then it does not. This procedure is done via the use of computers.

Here is an example. Mr Chob writes a letter to Mrs Bamber. Mrs Bamber pays it into her account, forthright. In the assumption that she now has that money, she writes a cheque in order to pay for her new jewellery box. She is not aware though, that Mr Chob has insufficient funds in his account, to pay for the issuing of the cheque. When Mrs Bamber’s bank tries to recoup the money from Mr Chob’s bank, the check is refused. Resultant in two bounced cheques.

Cheques can take a number of working days to clear. This period of time is between three and seven working days. There are factors to consider that effect cheques clearing:

1. The day of the week that a cheque is paid into an account. A cheque that is paid in on a weekday is generally subject to normal clearing conditions. A cheque on a Saturday however, may take longer to clear.

2.If a bank has a cheque paid into it that is from another one of its accounts then it will generally clear quicker. There are building societies that take longer than banks to clear cheques.

3. The currency of the cheque effects how long clearance will take.

Clearing Foreign Currency Cheques

Cheques that come from foreign banks can often take more time to clear. Certain currencies are treated normally by certain banks. American dollars often are. Minus any foreign transaction fees, the cheque is credited to your account normally.

It is not uncommon though, for some banks to take up to six weeks, by the time a cheque has cleared through two systems. These institutions are extremely cautious, waiting until the whole process reaches completion.

Avoiding Charges For Bounced Cheques

Be vigilant, in terms of Checking, and knowing the dates that direct debits and standing orders are exiting your account. You should know if there are payments due to leave your account, and that this means there is less money available to you than there appears to be. To be sure to avoid bounced cheques, know the score with your account. Always be AWARE!

About the Author

This article is written by Jonathan L Walker, on behalf of Claims Management UK, specialising in helping people with their Reclaim Bank Charges

Article Directory Source: http://www.articlerich.com/profile/Jonathan-Walker---Big-Blue-Tomato/36935

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