Change with cheques

New changes in the way cheques work will please many bank account holders who have suffered from fraudulent cheques and cheques that bounce in the past.

Before 30 November, if you put a cheque into your bank account which turned out to be fake or ended up bouncing, the banks had every right to withdraw that money from your account - leaving you a few pounds poorer.

After a years discussions within the Office of Fair Trading, it was decided the rules needed to be changed within the cheque clearing system because of the amount of cheques which went uncleared. So from the end of November 2007, cheques will clear within 6 days - guaranteed.

Cheques never cleared with a definite finality as banks were always legally allowed to recoup that money weeks or months after the cheque had been paid in leaving the payee in the lurch.

Cheque fraud is still a common problem apparently, which costs us about £31 million a year. Although it has been falling in recent years, it is still happening, particularly with internet and Autotrader sales.

Still more good news too, as the cheque clearing process increases, so to does the interest some banks are paying on cheques paid into accounts - instead of waiting for days before interest started to accumulate, it will now happen within 2 days of cheques being paid in.