A question about check clearing

[Martini_Enfield]

@gigi

Really? Do you still use cheques for anything? The hassle of getting a money order would be a drag when you want to send in a utility payment or pay your rent.

Cheques are still used here in Australia, but not, in my experience, by individual people.

Businesses still use them, as they’re a handy way of providing a paper record of where money has been paid (and to whom), and they can also be used to pay odd amounts of money (Australia doesn’t have 1 or 2c pieces, so a payment from Company A to Company B for $1,463.07 has to be made either via a cheque or electronic transfer). I write freelance articles for a well-known and respected publication in Australia, and they pay me by cheque for these very reasons- accountancy (at both ends), tangible records of where the money went and whom from/to, and general accuracy.

If an individual person wants to pay their rent, or the power bill, or whatever, you have several options:

Rent is usually paid straight into the Landlord’s bank account- you either go to the bank and put the money in on a special form, or, depending on your landlord, you can deposit the money via phone banking, internet banking, or Bpay (more on Bpay shortly).

To pay “utilities” (and by that I presume you mean the power bill, phone bill, car registration, etc), and most other bills, you go to the Post Office and pay them there, or you can pay via credit card to the company, or you can use this Bpay thing I’ll get to in a moment.
You can use cheques to pay for this sort of thing, but no-one under 30 does. In fact, I don’t know a single person around my age (24) that has a chequebook or would even know how to properly draw a cheque, even if told they could have the entire contents of the Sultan Of Brunei’s Swiss Bank Account should they do so correctly.

OK, this Bpay thing I’ve been talking about. Basically, Banks in Australia want you to stay the hell away from them. Customers in the bank means tellers, tellers mean wages, wages means the CEO has to have gold plated taps in his executive ensuite instead of solid gold ones.

So, the banks and most major companies got together and came up with a system to allow people to pay bills without going anywhere near the bank (to get money out or acquire chequebooks), the Post Office, or even “Other People”.

Using phone banking, you enter in your account, phone banking PIN, and enter in a Biller Reference Number (on the bill), your Customer Reference Number, and how much you want to pay. The money goes out of your account and into the Biller’s account, and you get a unique receipt number to prove you made the payments.

It sounds complicated, but it’s actually pretty straightforward, and allows you to pay bills without spending most of your day in the queue at the post office or the bank. It’s also available 24hrs a day, seven days a week, so when you realise you forgot to pay the power bill at 4am in the morning after knocking off from the ultra-late shift, you can pay the bill via phone (even a mobile phone) while you’re sitting in a coffee shop somewhere drinking coffee and hoping they haven’t cut the power off yet…

A certain bank (Which Bank? I hear you ask… yes, That Bank) has been most strenuous in encouraging people to take up NetBanking. Personally, I wouldn’t trust NetBanking as far as I could comfortably throw teh Intarweb, and as I keep telling anyone who tries to sell me on the virtues of NetBanking, I wouldn’t touch Internet Banking with somebody else’s 60ft pole.

One other thing: Cheques are slooooowww. Most people want their money NOW, dammit! Having it sitting somewhere waiting to be cleared is inconvenient and leads to the fraud problems others have mentioned, which is where

I didn’t mention how you were supposed to pay all your bills AT the Post Office without Cheques, did I? Careless me.

Australia and New Zealand have this excellent system called EFTPOS. Eftpos stands for Electronic Funds Transfer at Point Of Sale.

Pretty much every shop, petrol station, post office, government department, and anyone else who might want to take money from you for legal goods and services rendered in the country has an EFTPOS terminal by the register, through which you swipe your ATM card, enter your PIN, and the money goes straight from your account to the merchant’s, simple as that. It’s fast, secure, and very, very useful.

EFTPOS is, I believe, largely responsible for the decline of Cheques in Australasia, although it is important to remember that there are people out there (people who still remember a time when Mussolini and Adolf Hitler were involved in Current Events, but people nonetheless) who use cheques for things, and the facilities are there for them to do that- it’s just not the norm for individuals to pay for things with cheques anymore in this part of the world.

Money Orders are primarily used for buying stuff of people overseas or in other States, as (IIRC) they don’t personally identify you- it’s just effectively a voucher good for $X.xx that they can cash at the post office, with the benefit of being accountable and convenient. Money Orders are obtained from the Post Office, but they charge a small fee to draw one. They used to be poor cousins to personal cheques, but they’ve grown enormously in popularity thanks to Ebay, oddly enough.

Hope that’s answered your question!

[Kevbo]

for the bazillienth time:

suppose you deposited a counterfiet bill. It was a good counterfiet, so the bank didn’t notice. well, not right away, but eventually, they did cotton to the fact. AND they had an iron clad thread of evidence that proved that this bill came fom you and nobody else. Why would any court give a flying copulation when you passed this fake note?

For some reason people seem to think that if a note was supposedly issued by a bank or an individual, that some statute of limitations should exist after a financial institution, actint on good faith, accepts this promise of payment. Screw that. If you pass a bad note to anyone: bank, tax man, or local store, YOU are liable for it’s value, regardless of your good intentions. Being an ignorant middle man only exempts you from criminal liability for the commission of the forgery, NOT for the debt which you knowingly, or un-knowingly attempted to satisfy with a forged note.

[Martini_Enfield]

@Kevbo

for the bazillienth time:

suppose you deposited a counterfiet bill. It was a good counterfiet, so the bank didn’t notice. well, not right away, but eventually, they did cotton to the fact. AND they had an iron clad thread of evidence that proved that this bill came fom you and nobody else. Why would any court give a flying copulation when you passed this fake note?

For some reason people seem to think that if a note was supposedly issued by a bank or an individual, that some statute of limitations should exist after a financial institution, actint on good faith, accepts this promise of payment. Screw that. If you pass a bad note to anyone: bank, tax man, or local store, YOU are liable for it’s value, regardless of your good intentions. Being an ignorant middle man only exempts you from criminal liability for the commission of the forgery, NOT for the debt which you knowingly, or un-knowingly attempted to satisfy with a forged note.

I’d be interested to hear a cite for this… I’m pretty sure that in this part of the world, there are “good faith” provisions that mean the bank has to simply eat the cost if it turns out the note was a forgery, but I can’t actually provide a cite for this, so don’t quote me on that.

[Cunctator]

@Martini Enfield

Cheques are still used here in Australia, but not, in my experience, by individual people.

Plenty of individual people still write cheques in Australia. I am one.

[Martini_Enfield]

@Cunctator

Plenty of individual people still write cheques in Australia. I am one.

I direct you to my “In my experience” disclaimer.

I don’t know how you guys do things down in Sydney, but up in Queensland I personally do not know of any individuals using cheques, nor have I ever worked anywhere that would accept one from an individual…

Of course, now every other Queensland doper is going to come in and say that they still use cheques and so does their 17 year old cousin and her pet wallaby…

You’d think I would have learned by now that Australia is just too big a place to make generalisations… :smack:

[The_Long_Road]

@Kevbo

for the bazillienth time:

suppose you deposited a counterfiet bill. It was a good counterfiet, so the bank didn’t notice. well, not right away, but eventually, they did cotton to the fact. AND they had an iron clad thread of evidence that proved that this bill came fom you and nobody else. Why would any court give a flying copulation when you passed this fake note?

For some reason people seem to think that if a note was supposedly issued by a bank or an individual, that some statute of limitations should exist after a financial institution, actint on good faith, accepts this promise of payment. Screw that. If you pass a bad note to anyone: bank, tax man, or local store, YOU are liable for it’s value, regardless of your good intentions. Being an ignorant middle man only exempts you from criminal liability for the commission of the forgery, NOT for the debt which you knowingly, or un-knowingly attempted to satisfy with a forged note.

In a typical American bank, if the teller does not catch the counterfeit bill when it is deposited, the bank eats the loss. It has nothing to do with user agreements or the law, it’s simply too hard for the bank to keep track of the bills. When you deposit cash, it goes into the teller’s draw with other cash. There is no division between who made what deposit. Checks are obviously a different story but cash, once deposited, is not kept separated and there are no means of tracking down the depositor once the transaction is complete. Obviously banks make a point of teaching tellers how to tell if a bill is counterfeit.

In almost every case where our teller has caught counterfeit bills, it was from a large volume vender, usually at a fairground or something similar. The person is doing so many transactions that they fail to catch the bills. In the case of Katrina with ruined cash from flooded homes, it is being labeled by customer and sent off to be replaced. This is preventing people from passing off bad bills are ruined money.

[Random]

@Galaxyhorse

Maybe American banks are different than Australian.But in Australia one can phone the bank and (completely) verify a bank or cashier’s cheque. Maybe you are saying that one cannot verify a personal cheque-that is correct.

I had missed that your prior post was intended to apply only to bank checks (in the sense of cashier’s checks) and not generally to bank checks in the sense of (checks drawn on a bank). I’ve seen the term used both ways, even in banking law contexts. (For example, the leading US treatise on the subject is Brady on Bank Checks, and Prof. Brady is clearly using the second definition, a point he makes in footnote 1 to section 1.01 of the treatise.)

Under the first definition, you have a point, although “ringing the bank” still wouldn’t be a complete protection in all circumstances. Cashier’s checks can be stolen. A common scenario: Unless the cashier’s check is payable to you, you wouldn’t know that the endorsement of the payee signing it over to you is valid (it is a common practice in the US that, for certain types of transactions, the buyer will have his bank draw a cashier’s check payable to himself, and then sign it over to the seller if the deal closes or goes forward.)

A bank need not honor a cashier’s check unless it has the valid signature of the payee.

(This is general information and not reliable legal advice. See a lawyer licensed in your jurisdiction if this issue comes up in a real-world sense.)

[The_Long_Road]

A minor coincidence that the day after posting to this thread, we got counterfeit bills in a deposit. The teller caught it as she was counting the money. The look was authentic but the feel gave it away immediately. It felt like wrinkled paper. Customer wasn’t thrilled but such is life.

[Galaxyhorse]

@Random

I hatise.)

Under the first definition, you have a point, although “ringing the bank” still wouldn’t be a complete protection in all circumstances. Cashier’s checks can be stolen. A common scenario: Unless the cashier’s check is payable to you, you wouldn’t know that the endorsement of the payee signing it over to you is valid (it is a common practice in the US that, for certain types of transactions, the buyer will have his bank draw a cashier’s check payable to himself, and then sign it over to the seller if the deal closes or goes forward.)

A bank need not honor a cashier’s check unless it has the valid signature of the payee.

(

Another difference between USA AND AUS banks. The Bank or Cashier cheque must go into the bank account of the person who it is made out to. It cannot be signed over to another person. So with these circumstances you can ring up the bank and verify the bank cheque.

[gigi]

@Martini Enfield

Hope that’s answered your question!

Yes, many thanks! I’m trying to think of the times I and my pet wallaby stil use checks and teller services:

Check to my landlord for monthly rent–she’s an individual and not a company
Check to Visa monthly–I know I could pay on-line
Checks to agencies for occasional donations
Check to the oil company for oil delivery–sometimes use credit card but check pays it immediately and no debt to service
Check to auto/renter’s insurance company–again no debt service
Check to merchants when ATM is down or I don’t have cash/they don’t take credit

Teller–to drop off bag of loose change for deposit to my account
Teller–to set up new account

[Martini_Enfield]

@gigi

Yes, many thanks! I’m trying to think of the times I and my pet wallaby stil use checks and teller services:

Check to my landlord for monthly rent–she’s an individual and not a company
Check to Visa monthly–I know I could pay on-line
Checks to agencies for occasional donations
Check to the oil company for oil delivery–sometimes use credit card but check pays it immediately and no debt to service
Check to auto/renter’s insurance company–again no debt service
Check to merchants when ATM is down or I don’t have cash/they don’t take credit

Teller–to drop off bag of loose change for deposit to my account
Teller–to set up new account

Sounds like you’re running a business… read my posts again. I don’t know of any individual people (ie, not a business or merchant or trader or incorporated club) around these parts who still uses cheques, but there’s always exceptions.

I make a point of using Teller services ("Charge me Bank Fees, will you? Just for that, I’m going to make you do work by going to the Bank and not using NetBank! BUWAHAHAHAHAHA! ), but because I work strange hours, I find the Post Office is the most convenient place to get a lot of banking done. Either that or a nearby branch of my bank which has lots of staff and never has any customers, and the staff know me- so I’m and out in under 10 minutes, every time.