CHEQUE CASHING HIGH STREET SHOPS

CHEQUE CASHING HIGH STREET SHOPS

Didn't find your answer?

Had recent instance where the legitimate recipient of a cheque from my company has cashed this at one of the high street cheque cashing shops. Even though the cheque was crossed account payee only, the transaction still went ahead, albeit the customer was only given a proportion of the cheque value in cash and told that he would be informed when he could collect the balance - less the commission charge.

Just interested if anyone (perhaps someone from a bank) can outline how they deal with this situation, if there are any means of preventing it happening.
mike gwynne

Replies (5)

Please login or register to join the discussion.

DougScott
By Dougscott
25th May 2007 15:48

Fraud
We had an instance like this where we sent out a Payee Only salary cheque to a weekly temporary worker which was cashed at one of these places. The temporary worker claimed never to have received it. We wrote to our bank asking them to refund the money as it should not have been cashed. After a bit of resistance from them they refunded us.

Thanks (0)
David Winch
By David Winch
24th May 2007 16:30

Why?

Just out of interest, why would you want to prevent the legitimate recipient of a (cheque) payment from you from obtaining the money in cash?

David
www.MLROsupport.co.uk

Thanks (0)
avatar
By martthedj.yahoo.com
26th May 2007 01:28

These are on the increase.
There are now lots of these shops in the high street.
Basically they will cash your cheque on the spot and take between 2 and 4% as their fee.
They contact the cheque issuer by telephone to check that the cheque is genuine and after the recipiant providing some ID and photos thats basically it.

Thanks (0)
David Winch
By David Winch
26th May 2007 13:39

Fraud - but by whom?

Doug

I did hear of a case in which a temporary worker suffered a lot of cheques going missing, cashed by someone else and having to be replaced.

There was a suspicion that the temp had found a way to double his / her earnings by getting paid twice. I think in that case the police were able to get CCTV footage from a cheque cashing shop which showed the temp actually cashing a 'lost' cheque, but he / she said he / she must have become confused as to which cheques he / she had received and which had been lost - and so had inadvertantly claimed again for a cheque which had been safely received. As a result the case did not go to trial.

If that is your suspicion then you might like to consider:-

(i) not using that individual in future,
(ii) if the person was taken on through an agency, alerting them to the issue,
(iii) if you are in the 'regulated sector' making a report to SOCA,
(iv) sending cheques by recorded delivery post in future so that you have evidence that the cheque was at least delivered to the person entitled to it or insisting that temps have a bank account and paying them by direct credit into that account.

I appreciate that you may not regard this as a wholly satisfactory situation.

(As you may know, cheque cashing shops are in the 'regulated sector' for money laundering purposes which involves them obtaining ID where the regulations 'bite', for example where there is an ongoing relationship or where the amount involved exceeds 15,000 euro - about £10,000. In practice many such shops routinely ask for ID for much smaller amounts.)

David
www.AccountingEvidence.com

Thanks (0)
avatar
By martthedj.yahoo.com
29th May 2007 11:29

more information
Mike a little more information.

These businesses will have to be registered under the consumer credit act.
In April this year regulation of the consumer credit act 1974 and ammendments of 2006 fall under the regulation of the F.O.S
Financial Ombudsman service.
The FOS levy a fine of 400.00 for any complaint it investigates against breaches or malpractice of the 1974 CCA whether the matter is upheld or not.I would certainly think about reporting this to them.Its free and quite speedy.
As I said it is usual for the shop to seek verification from the cheque issuer that it will be paid.I have known some to also call cheque validation companies too.
They make it clear that if you are paid out by them and the cheque is later returned as unpaid,then the customer is responsible for returning the money advanced as well as the fee.
I am a moderator on the consumer action group www.consumeractiongroup.co.uk and have assisted a few members there who have had problems with this.

Thanks (0)