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Advice about a stopped cheque.

Discussion in 'Legal' started by cambs01, Mar 1, 2012.

  1. cambs01

    cambs01 UKBF Newcomer Free Member

    Posts: 2 Likes: 0
    Scoured the web for an answer but couldn't get the exact info I need. Hope someone here can help.

    We accepted a cheque for services given just before xmass, I banked it with the others as usual. Early January the cheque is returned to us with "payment stopped" on it. I called my bank, but they have no access to the info. on why it was stopped. I believe payment stopped is not the same as "bounced" (???) so lack of funds is not the reason.

    We informed the client, who said she would pay up. After 2 months she hasn't paid up, in fact after that intial exchange about the cheque she now refuses to communicate with us at all, and clearly has no intention of paying. 99% sure lack of money is the not the issue, she seems to have an issue with the service, although what that is is not clear to us.

    According to the cheque rule, she doesn't have a leg to stand on. The initial cheque is a contract and promise to pay. The info on the web seems clear on this, regardless of her reasons for stopping the cheque, she has to honour it. We can sue with the expectation of an easy decision in our favour.

    Now here is the thing. Upon looking at the cheque I see that the amount in words does not match the amount in the number box, the word amount is higher by 20 pounds and incorrect. The amount in numbers is correct and what she actually owes us. Everything else is ok (the date, signature etc). Curse myself for not checking the cheque when I took it from her - but having taken loads of cheques before I tend to assume my clients know how to write a cheque properly. Needless to say all cheques are scrutinized carefully now before banking.

    So our current guess is that the bank or the client stopped the cheque because of this discrepancy. I don't know the procedure, would the client's bank call her first and ask her if she wants it stopped or ask her what the proper amount should be? Or is it stopped by default? According to one website (a USA one) the amount in words is the "legal" amount, and that overrules the amount in numbers, the number amount is written voluntarily. I have no idea about the situation in the UK.

    So if we go to the courts, what happens? Am I at fault for unknowingly accepting a incorrect cheque (like unkowingly accepting a forged bank note maybe) and the case is thrown out? Seems ludicrous that I would be, because people would be writing similarly incorrect cheques in the hope of not having to pay for anything.

    Or, does the cheque rule still apply? My gut feeling is that she has to pay up, but I want all my info clear before we take her to small claims.

    Any advice much appreciated.
    Posted: Mar 1, 2012 By: cambs01 Member since: Mar 1, 2012
  2. Cobby

    Cobby UKBF Ace Free Member

    Posts: 3,021 Likes: 623
    You provided a service and your client provided a cheque as payment for that service. As the client hasn't complained then you can assume the work was acceptable to them. You have a cheque from them with both their bank details and their signature on it.

    The discrepancy on the cheque will at best be seen as a mistake by the client and motivation for them to either correct it or provide alternative payment. At worst it could be an attempt at fraud. It may be something the client heard from a friend in a pub about how to get out of paying for something, or it may just be a mistake.

    Write your client a letter asking for a reason for the non payment and lay out a time-frame in which they must pay (14 days, 28 days, whatever). Then go from there.
    Posted: Mar 1, 2012 By: Cobby Member since: Oct 28, 2009
  3. Charlie B ACS

    Charlie B ACS UKBF Ace Free Member

    Posts: 1,075 Likes: 253
    Play hardball, issue a letter beofre action, give them 14 days, then put a county court claim in, your claim being for the cancelled cheque.

    Keep the cheque, and if she doesn't pay with a judgement, you have her bank details for a 3rd part debt order.
    Posted: Mar 1, 2012 By: Charlie B ACS Member since: Feb 21, 2008
  4. yourcreditmanager

    yourcreditmanager UKBF Regular Free Member

    Posts: 241 Likes: 63
    It certainly sounds fishy... it's interesting that the cheque was returned as stopped rather than words and figures differ which would indicate to me she immediately stopped it before she realised there was a potential discrepancy in the words and amounts written... i.e: she's playing a bit of a game. Giver her a written seven day notice of your intention to sue on the grounds she has not advised you of any dispute with the services provided and see what happens. How much is the cheque for exactly?

    Posted: Mar 1, 2012 By: yourcreditmanager Member since: Jan 22, 2011
  5. cambs01

    cambs01 UKBF Newcomer Free Member

    Posts: 2 Likes: 0
    Many thanks indeed for those replies. Gives us a clearer idea of how to proceed.
    Posted: Mar 2, 2012 By: cambs01 Member since: Mar 1, 2012