Check That Cheque Says Banking Ombudsman

Check That Cheque Says Banking Ombudsman

The Banking Ombudsman Deborah Battell is reminding people about the precautions they need to take when using cheques, following a spate of recent cases received by the Office involving stolen cheques.

“Despite what some people might think, cheques are still in common use – particularly in small businesses where large sums are often transacted.

“But people seem to forget – or have never known – the correct way to cross a cheque to ensure it goes to the right person and account. As a result, we continue to see cases of theft where stolen cheques have been deposited by fraudsters into their own accounts and the proceeds then withdrawn.”

Ms Battell said that typically, people think that by crossing the cheque ‘not negotiable’, they are protected from the possibility of the cheque being paid into the account of anyone but the person named as the payee on that cheque.

“The words ‘not negotiable’ just mean the cheque cannot be cashed – instead the money must go into a bank account – but in the cases we’ve seen, this could ultimately be into the thief’s own account. Crossing out the words ‘or bearer’ will not offer protection from such a theft.”

Ms Battell said that if people are writing a cheque, they should write either ‘account payee only’ or ‘not transferable’ on the cheque to ensure the money is paid to the person named on the cheque.

“The words ‘account payee only’ or ‘not transferable’ tell your bank to withdraw the money from your bank account and deposit it into the bank account of the person named as the payee on the cheque, and only that person. In the unfortunate case of theft, your bank will not allow it to be paid to anyone but the person you named as the payee.”

ENDS

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