Why did a 'cleared' cheque bounce?


A cheque was paid into my account. Four days later funds showed as cleared. I withdrew and paid money to another account, then two days later the cheque was returned unpaid. My account is now in arrears.

Bank Cheque

Clearance: Why did my 'cleared' cheque bounce?

How in the 21st Century can you take cash from a uncleared cheque? R.K., Kensington, West London

Brian Capon at the British Bankers' Association replies: Changes to the cheque clearing system were introduced at the end of November 2007 to increase clarity and certainty.

These changes, known as the 2-4-6 change, set a maximum time limit for each of the stages in clearing a cheque paid into a current or basic bank account.

Providing a cheque is paid into a bank or building society before the cut-off time for that day's work, you will start to receive interest on the money two working days later (assuming the account is interest bearing).

On the fourth working day you will be able to withdraw the money. If you have a savings account though, this maximum time limit could be slightly longer.

If the cheque hasn't bounced and been debited to your account by the end of the sixth working day, the bank or building society will not be able to debit it to your account unless you give your permission or unless you are a knowing party to a fraud.

Banks will compete on clearance times, so some banks may apply shorter timescales than those set out in the 2-4-6 change.

Until the changes were introduced, there was no formal time limit for an unpaid cheque to be returned to your account.

Businesses accepting cheques backed by a valid cheque guarantee card will be fully protected provided they have complied with the rules of the scheme.

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Why did a 'cleared' cheque bounce?

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