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November 29 2007
Cheques guarantee payment
New cheque clearance rules issued by the banking industry come into force on the 1st -of December.
Internet fraud specialists the 3rd Man Group issued an Early Warning to all retailers, not to fall foul of the new 2-4-6 cheque clearance rules issued by the banking industry, which come into force on the 1st of December.
The new rules state that payment by cheque is not 100% guaranteed until the 7th working day after the cheque has been presented to your bank for payment, even if the payment looks to have cleared in your account on day 4. The money is not 100% guaranteed to be yours until close of business on day 6.
Therefore anyone accepting payment for goods should not, whether an individual or a retailer, dispatch the goods until 7 working days after the cheque has been presented for payment, unless the payment has been screened by reputable fraud screening service.
3rd Man Director Andrew Goodwill commented
“I welcome the new 2-4-6 rules, as they give a guarantee that on day 7 a retailer can dispatch goods with the certainty that the money is cleared funds in their bank account, and can not be clawed back unless the payee is a knowing party to fraud.”
“By extending the delivery time for purchases by cheque, I believe we will see the demise of cheques as a means of payment for goods from mail order companies or for internet purchases. I await the day when we receive this type of guarantee for credit card payments”.
A way of settling a debt without chargebacks, surely that can’t be right? We agree with Andrew, it would be nice to see the end of chargebacks but somehow we don’t think it will ever be in o-ur lifetime. Your comments would be appreciated and dealt with in the strictest confidence marcus@internetretailing.net
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