Cheque gaurantee cards

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bond-007

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Are there any circumstances where a bank can bounce a cheque with a valid cheque gaurantee number on the bank? I was under the impression they must honour all cheques provided a valid card number and expirty date is written on the back?

Thanks for your help and insight.

007
 
Well, they could presumably bounce the cheque if there are insufficient funds or an insufficient overdraft facility available in order to honour the cheque. Or if the cheque was incorrectly written perhaps. I've never heard of anybody writing the cheque guarantee card details on the back of the cheque. If the card was a combined card (e.g. cheque guarantee and ATM or Laser card) then allowing somebody to transcribe these details might be a bit of a security lapse.
 
The bank is generally 'authorised but not obliged' to honour a cheque that would result in the customer running an unauthorised overdraft position.

Note that it is not possible for the customer (drawer) to stop, countermand (cancel or recall) or post date a cheque that was written in conjunction with the cheque guarantee card. (I don't know if this is standard accross all Irish retail banks, but I would presume that it is)
 
I've never really understood the point of cheque guarantee cards to be honest and in all the years that I've had one I have never once used it when paying by cheque.
 
Lots of places insist of them, Dunnes, Tesco all petrol and garages etc. Its their way of ensuring the cheque won't hop.
 
ClubMan said:
Well, they could presumably bounce the cheque if there are insufficient funds or an insufficient overdraft facility available in order to honour the cheque.
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I'm 99% sure this isn't the case. The whole point of the the cheque guarantee card is to guarantee payment to the payee up to the limit of the cheque card (used to be IR£200). I can't think of any reason why the bank would bounce the cheque, unless they suspected some kind of fraud was involved. I had kind-of forgotton about cheque guarantee cards - Do standard ATM cards still double as cheque guarantee cards?
 
It doesn't make sense to me that a cheque guarantee card would necessarily guarantee the payment of cheques even if there are insufficient funds to cover them. If I have no money in my account and no overdraft facility and I write a complete book of cheques then I am sure that the bank will not cover them and some or all of them will bounce. Some ATM cards are also cheque guarantee card. A cheque guarantee card carries the cheque guarantee logo.
 
Yep - this was the whole purpose of the guarantee. And yes, you could spin through an entire cheque book up to the (relatively low) limit per cheque, though there was some restriction about not using multiple cheques as part of a single transaction. Without the guarantee, the retailer had little comfort that the cheque would be 'good'.
 
The standard cheque guarantee amount is €130 as far as I know (used to be IR£100). Chequebooks often contain 25 cheques. As far as I know my bank (PTSB) will be issuing books of 50 as standard real soon now. You are saying that I could write, say, 25 x €130 = €3,250 in cheques (to different retailers) and have them paid even if I had no money in my account? Seems unlikely to me that this would work in practice. The guarantee of payment offered by a cheque guarantee card seems to be subject to some terms & conditions but I can't seem to find what these are.
 
I know someone who wrote out a book of 40x€130 cheques with no money to back them up. The bank begrudingly paid them. The bank had kittens when the cheques hit the bank. He wrote them out to his friends who gave him the cash and he used the €5K obtained to leg it to Australia.
 
How does a bank know/check that the cheque guarantee card was presented to the payee at the time that the cheque was handed over?
 
So long as the card number and expiry date is written on the back of the cheque that is enough. The receiver is supposed to take the card and copy down the info.
 
Note that [broken link removed] defines the cheque card (aka cheque guarantee card) as follows;

Cheque Card
Account holders use it as proof of identity, and as a guarantee the bank will honour the cheque. When a person accepts a cheque, the signature on the cheque should be compared with the one on the card. It should be an up-to-date card and the card number should be written on the back of the cheque.
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RainyDay said:
and the card number should be written on the back of the cheque.
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Right - I didn't know that this was the way it worked. Come to think of it I'm not sure that I have ever used my cheque guarantee card when presenting a cheque (not that I do this that often these days, other than when mailing them, what with the availability of alternative methods of payment, in particular Laser and credit card).
 
Just received my new Maestro debit card from AIB which replaces the laser/cheque guarantee card and the ATM card. On page 2 of the explanatory leaflet it specifically says "The card guarantees a cheque, to the value of € 130 ".
I take that to mean just that , AIB will pay up even if I have no funds in my account, provided the cheque doesn't exceed €130 .
 
Re: cheque guarantee cards

demoivre said:
Just received my new Maestro debit card from AIB which replaces the laser/cheque guarantee card and the ATM card. On page 2 of the explanatory leaflet it specifically says "The card guarantees a cheque, to the value of € 130 ".
I take that to mean just that , AIB will pay up even if I have no funds in my account, provided the cheque doesn't exceed €130 .
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Cheque guarantee cards guarantee the merchant up to the value of the guarantee, e.g. €130 (£100).

However, this guarantee only applies to the FIRST bounced cheque you write. If a cheque bounces, my understanding is that the merchant can apply for his money from the bank. Once the bank pays this - thus honouring the chq guarantee - the guarantee is immediately null and void for future transactions. I think you (as the customer) are even supposed to return the card!

So, if you wrote 10 chqs for €50, only the FIRST chq for fifty would be honoured by the guarantee, if a merchant claimed on it.

If you write a chq for much more than €130, say for a grand, the €130 guarantee is not much use to the retailer.

This is one reason why the govt was supposed to be pushing e-money (Laser card, credit cards, etc.), which they were doing until they increased the stamp duty on cards to anti-competition and anti-consumer levels.
 
I see that the [broken link removed] site says:

Cheque

A written intruction from you to your bank it [sic] to pay a stated sum of money from your account to a person named on the cheque or occasionally to yourself. If there is not enough money in your account the bank may not honour the cheque (it bounces).

There is a guarantee, however, to pay a minimum of €130 if the person accepting the cheque has also been shown a cheque guarantee card by you.
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I wonder do they mean maximum instead of minimum?
 
I note in one of the T&C's that it says " You may not use the card:- to create an unauthorised overdraft on the account or extend an overdraft beyond an approved limit "

This contradicts what they say in the leaflet that I mentioned above.
 
demoivre said:
I note in one of the T&C's that it says " You may not use the card:- to create an unauthorised overdraft on the account or extend an overdraft beyond an approved limit "

This contradicts what they say in the leaflet that I mentioned above.
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Yes I noticed this apparently contradictory position myself when doing a bit of reading last week.
I think this is to discourage people from using the card to run up unauthorised excesses (they have not done a credit check to see if you are suitable for an overdraft).

As I posted earlier, the bank is 'authorised but not obliged' to honour checks that create unauthorised positions.
 
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