Cheques – not quite as you know them.
You know – I haven’t actually written a cheque in over 5 years. I just don’t use them here. With most people taking Eftpos, or direct credit via Internet banking – its actually quite rare for most people to need to do it. On the odd occasion that cheques are needed – I get cash instead (I don’t even know where my chequebook is!)
However, there is something you need to bear in mind if you do choose to use them here. Apart from for some really bizarre reason there’s a tax applied to their use, and you have to pay the bank for the privilege of getting a chequebook. Ok, that last bit’s probably not a huge shock.
Cheques in the UK are automatically “crossed” by the bank. That’s those 2 lines that you find with the words “AC Payee” or “Account Payee”. In New Zealand, they don’t have that. Now this is a basic security detail. As basic as it gets. That note on the cheque means that it can only be paid in to the account of the person you wrote the cheque to. It can be paid into someone else’s account.
The Banking Ombudsman has just highlighted this issue in an article in the Dom Post. It seems that people are crossing their cheques “Not Negotiable” which does not offer the same protection “Account Payee Only”.
The ombudsman notes that Banks could just sort this out by pre-printing the phrase, but stops short of telling them to get a grip and actually do it.
So be aware: NZ banks are failing to operate one of the easiest security measures they could use, and they charge you for the chequebook. If you do use them when you get here, make sure you cross them properly, because apparently the banks aren’t refunding funds that go missing.
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Related posts:
- Avalon’s Money Thread: Banks and Bank Charges.
- Watch those Direct Debits in New Zealand.
- Interest rates in New Zealand – Investigation into rip-off break fees.
Comments
One Comment on Cheques – not quite as you know them.
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Juli Ryan on
Fri, 2nd Apr 2010 3:56 pm
Yes, we never use cheques, either. That crossing problem seems like it easily could be solved by the banks. I don’t get it.
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