- Short film available to view here
- Explains clearing process and timescales, such as when funds are cleared and what happens if a cheque ‘bounces’
With market research confirming that consumer understanding of the cheque clearing process is still very low, the Cheque and Credit Clearing Company (C&CCC), has today (27 November 2009) launched an online film that helps explain the different stages involved in clearing a cheque. The 'Animated Guide to the Cheque Clearing Process' is a two-minute film that clearly explains how a cheque is cleared - showing how, when and why cheques are moved around the country as part of this process - and what happens if a cheque ‘bounces’.
The film also covers information on when a cheque earns interest, when cheque funds can be withdrawn and when funds from a cheque can no longer be reclaimed by your bank. An industry-wide agreement, known as 2-4-6, was introduced two years ago that sets maximum timescales for each of these stages.
Angela Thomas, Managing Director of the Cheque and Credit Clearing Company, said: “Despite the fact that around half of us in the UK continue to receive cheques, our research shows that not many of us are actually aware what happens to a cheque when it is paid into an account. Our online film provides an easy-to-follow guide as to how the cheque clearing works, and can help everyone understand the key stages of this process.”
The market research also revealed that although the 2-4-6 timescales have been in operation since November 2007, very few people understand how these work in relation to the cheque clearing process. Only 10 per cent know when they can expect to earn interest on money paid in by cheque (which is no later than two days after paying it in) and just 23 per cent of cheque recipients can identify when they are able to withdraw money (no later than four days for a current account or six days for a savings account). Over three-quarters of cheque recipients (78 per cent) thought that the time when they could be sure a cheque could not bounce was sooner than it actually is (it is at the end of the sixth working day after paying the cheque in).
Although the industry’s commitment to the 2-4-6 timescales was clearly set out in The Banking Code - which ceased to exist at the end of October - customers can be reassured that the commitment remains in place. Additionally, to mark the fact that 2009 is the 350th anniversary of one of the earliest handwritten cheques known to be in existence in the UK, the Cheque and Credit Clearing Company has recently produced a comprehensive publication - Cheques and Cheque Clearing: An Historical Perspective - which includes sections covering: the history of the cheque; the evolution of the clearing process; the creation of the Cheque and Credit Clearing Company; and key dates during the 350-year lifetime of the cheque.
The document is downloadable from www.chequeandcredit.co.uk, where cheque facts and figures and advice regarding all aspects of cheque payments and the clearing cycle can also be found.
ENDS
For further information contact 020 7711 6251 E: press@ukpayments.org.uk
Notes to editors:
1 The Cheque and Credit Clearing Company (C&CCC) is a membership-based industry body which manages the cheque clearing system in Great Britain, including the processing of bankers' drafts, building society cheques, postal orders, warrants and government payable orders. Its wide remit also covers the management of the systems for clearing paper bank giro credits and euro-denominated cheques.
2 For consumers, 2-4-6 means that when you pay a cheque into your account: you start earning interest on those funds at a maximum of two working days after paying it in; you can withdraw the funds after a maximum of four working days; and, at the end of six working days, the money is definitely yours and cannot be taken out of your account without your consent unless you are a knowing party to fraud.
3 The research detailed in this release relates to consumer cheque market research conducted by TNS during May 2009 based on a representative sample of 2,000 UK adults.
4 In May 2008 the Payments Council published the first-ever National Payments Plan, setting strategy for payments over the next ten years. A main focus of the Plan is the future of cheques. There is broad agreement that usage of cheques is in long-term decline and that the decline needs to be actively managed. A date has not yet been set for the closure of the cheque clearing – this is being discussed at the Payments Council board meeting on 16 December. A closure date of 2018 has been mooted, but it is recognised that acceptable alternatives to the cheque need to be in place before the closure of the cheque clearing can take place.