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Stopping cheques - limited time to stop payment - bank advised customer had three days to stop cheque after presented for payment - request to stop cheque made two days after presented - incorrect advice - cheque cleared
In November 2007, Mr and Mrs L gave a cheque for $3,000 to their former accountants for payment of fees. The cheque was hand delivered on a Thursday with strict instructions not to bank it until the next day. The cheque was presented the next day, Friday.
The following Monday, because of a dispute with the former accountants, Mrs L contacted their bank to get urgent information about the process for stopping personal cheques. A bank staff member advised Mrs L that the cheque could be stopped and that they had three business days from when the cheque was presented in which to do so. Mrs L told the bank that she would discuss the matter with Mr L and that if they decided to stop the cheque they would do so the next day.
The next day, Tuesday, Mr L contacted the bank and instructed it to stop the cheque. The bank advised Mr L that the $3,000 would be credited back to their account within a few business days.
One week later Mr and Mrs L contacted the bank, as the funds had not been credited to their account. They were told that the bank had stopped the wrong cheque, and that the cheque for $3,000 had been cleared. Mr and Mrs L tried unsuccessfully to obtain important records from their former accountants and had to instruct new accountants to reconstruct their accounts.
The bank said that it gave incorrect advice about the timeframe for stopping cheques. It told Mr and Mrs L that:
• in exceptional circumstances only, the bank has 24 hours to stop cheques
• even if they had been given correct advice, the bank would not have been able to stop the cheque. This was because Mrs L first contacted the bank outside the 24 hour period for stopping cheques.
Mr and Mrs L were not satisfied with the bank’s response and complained to me.
The bank confirmed it had given Mrs L incorrect advice about stopping cheques. Had Mrs L been correctly advised of the very limited opportunity to stop a cheque, she could have asked the bank to stop payment on the cheque on the Monday and it would almost certainly have been stopped.
In those circumstances, I considered it reasonable that the bank reimburse Mr and Mrs L $4,500. This included compensation for inconvenience as well as the new accountants’ fee for reconstructing the accounts.
After further negotiation between the bank and Mr and Mrs L, the complaint was resolved on this basis.