Day 4 - OFT Test Case report

[Amethyst]

Re: Day 4 - OFT Test Case report

Right I think I am with you.

The cheque is given to the person you are paying - thus you are promising YOU will pay it - so its not a promise that the bank will pay it.

Yes ? or no ? So once its sent to the bank its a request for them to make the payment on your behalf ? thus still a request to the bank ?

Sorry....

[Guest]

Re: Day 4 - OFT Test Case report

We are way off topic here....but...No. It is an instruction. The banks are acting on our instructions. We do not issue cheques and ask that the bank pay them, if they feel like it. We issue cheques and with that we issue an explicit instruction that the bank, acting for us pay the sum stated on the cheque.

[Amethyst]

Re: Day 4 - OFT Test Case report

hmmmm ok - sorry re the off topic bit. Think I need lessons.

How can we instruct the bank to pay an unguaranteed cheque when we have no funds in the account - or is that still illegal to do ? See in my mind that makes it a request. Legally it is deemed an explicit instruction which the bank must abide by. Ok.

[Nattie]

Re: Day 4 - OFT Test Case report

Exc, can I ask you to check your notes on the above discussion and the one with the Barclays counsel, specifically on the part about instruction to pay with regards to Cheques and mandates for Direct Debits. Could you add to the part after Miligan has become slightly ruffled.

[TANZARELLI]

Re: Day 4 - OFT Test Case report

1. Provide a system of payment request i.e. cheque or direct debit. Available to all customers in the red or in the black.

2 Determine the validity of the payment request i.e. is the cheque signed? Done at the counter as with any other customer paying in a cheque that hasn't breached their contract.Is their a direct debit mandate? Once set up fully automated until changed by customer is it not.

3. All the payment requests are checked against funds available. Fully automated system

4. If insufficient funds are available the granting of an unauthorised overdraft is considered. This consideration is a contractual obligation. Fully automated syste

5. If granted, Always granted because you use it to make money/profit a letter of notice of an unauthorised overdraft stating the terms is provided. Fully automated system

’the threshold - £5 - you need to cross before a charge is triggered’’. Triggered by the fully automated system PMSL

[Amethyst]

Re: Day 4 - OFT Test Case report

is it fully automated per chance Tanz ?

[TANZARELLI]

Re: Day 4 - OFT Test Case report

I think it may well be lol

[Nattie]

Re: Day 4 - OFT Test Case report

I wish I could say it was not ALL automated but we are in a computerised age in which programs are the factors that determine payment or otherwise. Reports are provided for customers in the RED and when payments are refused but everything is AUTOMATED. not much to add really to Tanz

[TANZARELLI]

Re: Day 4 - OFT Test Case report

I was thinking/hoping you'd agree nattie :-)

[Nattie]

Re: Day 4 - OFT Test Case report

I was trying not to but I could not think of anything which required specifically PEN and INK and no computer process. There is none.

[TANZARELLI]

Re: Day 4 - OFT Test Case report

Well the gauntlet is more of a mitten so far really then isn' it peeps.

[righty]

Re: Day 4 - OFT Test Case report

I'm sorry Ame, in the what?

A cheque (and also a direct debit) falls with the ambit of an instruction and forms part of the contractual obligation that a bank owes it's client.

It is never a request to pay, this has been established over a long period of time. For example, cheques are still governed by a statute from the Nineteenth Century titled the Bills of Exchange Act 1882. For most purposes, cheques are lumped in with even more esoteric documents such as promissory notes and bills of exchange and that provides a form of consumer protection not afforded anywhere else in the banking world.

Under the 1882 Act, cheques are contracts in themselves. They are a promise by the drawer of the cheque that the the payee will be paid the money as stated on the cheque itself. This is so irrespective of the purpose for which the cheque is paid, with only very limited exceptions.

If a cheque, or indeed a Direct Debit were merely a request, then this could not be the case.

The banks know this, more recent confirmation was stated in Barclays Bank v Simms [1980]

Agreed:okay: - A cheque is not unlike a bank note which promises to pay the presenter & is signed in the name of the Bank of England or Scotland as the case may be

[EXC]

Re: Day 4 - OFT Test Case report

Nattie

Milligans respone to ''isn't a cheque an intruction, not a request?'' from what I can remember was long winded but I don't think he gave a definitive answer. Sorry!

Ame

There were about 8 in the feed room. The BBC guy told me the 11 press hearing places are not used as it's easier to follow the hearing in the feed room.

Tanz

The ''throwing down the guantlet'' quote by Milligan highlighted in the BBC's report was a reference to the common law element of current stayed claims. The banks will now argue that because regulations and directives deal specificaly with penalties/unfairness, they supercede common law.