Account Switch Cheque Not Honoured


#1

I switched to Starling around 4 months ago and have loved the service generally. I’ve had a few minor issues with some lack of functionality but accept that as part of the ongoing development process.

Today however, I had a call from a quite irate person whom I had done some business with. Before my account was switched to Starling I had written a cheque (for an amount of £90) and sent this off to the office in question.

I’d totally forgotten about the cheque until, after switching, I recalled the cheque and checking the old account statements could see it hadn’t been cashed. Panicking I tried to get hold of the office in question but was unable to track anyone down who could deal with the issue.

I checked online and discovered that due to the account switching service and the central clearing of cheques in the UK it shouldn’t be a problem.

It turns out it was a problem and wasn’t honoured, I’ve contacted Starling today and will let you know what happens next, however, I wonder if anyone else has come across this? From what I understand due to the account switching process the money should have been honoured from my new account.

On a side note, I had to go and get a postal order for which the princely charge of £11.25 on a £90 postal order was applied! The office in question is a government office and won’t take cash or any kind of online transfer at all.

Jon


#2

Starling is not (yet) part of the Cheque and Credit Clearing Company so it can not honour cheques.

The Current Account Switching Service (CASS) is owned by BACS who run BACS Direct Debits and BACS Direct Credits, but “The Cheque Redirection Service” which is part of the current account switching service is owned and operated by the Cheque and Credit Clearing Company to which Starling does not belong and hence you can not avail of that part of the service.


#3

Hi Mirow,

Thanks for the info, this is not clear at all (perhaps it is on the Starling site somewhere, I didn’t find it if it is)

From the Cheque and Credit Clearing Company site (https://www.chequeandcredit.co.uk/cheque-users/consumers/current-account-switch-service)

It states:
The Cheque Redirection Service

A key benefit of the Current Account Switch Service is the promise that any payments made to your old account will be redirected to your new account for 36 months after your switch takes place. The Cheque Redirection Service, which is owned and operated by the Cheque and Credit Clearing Company, is part of this service.

I’m no expert in language and legalese etc but that seems to be stating that one of the benefits of the Current Account Switch Service is the Cheque Redirection Service?

Are you saying it’s possible to be part of the Current Account Switch Service but not have all the features / protections of that service? That seems like a pretty big loophole.

If that is the case then Starling need to make that abundantly clear in their switching text. Thankfully I only had one cheque outstanding, I can imagine if you had a number of cheques outstanding that could get pretty expensive in charges applied by businesses for administrative costs.

Thanks for your help
Jon


#4

It is not clear on the CASS website.

They need to clarify you can only switch direct debits and direct credits to another bank with a UK sort code if that bank is signed up for BACS transfers, AND you can only switch cheques if the bank is a member of the Cheque and Credit Clearing Company.

Now if you use any sort code checker it will indicate if that sort code has BACS Credit, BACS Direct Debit, CHAPS, Cheques, etc abilities. They could then have something similar on the CASS site where you enter your existing account details and the bank you want to move to and it tells you A) if both banks belong to CASS, and B) what things can be switched between the two - such as direct debits and/or cheques.

At the moment it will mislead people, as they have gone for simple catchy words without going into detail with the ifs and buts.


#5

It is possible to be part of the CASS with cheques redirection or without. In effect you have four scenarios:

  1. total CASS transfer with originating account closed INCL cheques if destination bank IS member of Cheque and Credit Clearing scheme

  2. total CASS transfer with originating account closed EXCL cheques if destination bank NOT member of Cheque and Credit Clearing scheme

  3. partial CASS transfer with originating account remaining INCL cheques if destination bank IS member of Cheque and Credit Clearing scheme

  4. partial CASS transfer with originating account remaining EXCL cheques if destination bank NOT member of Cheque and Credit Clearing scheme

Therefore a note by Starling on how they are not part of the cheque redirection service would be advisable to help clarify this point.


#6

Agreed, and again thanks for your help.

Cheques are thankfully going away slowly but unfortunately some organisations still require them. For a government office to require a cheque or postal order is pretty poor in this day and age when GDS are all about digital solutions and improvements.

Anyway, I’ll send off the postal order tonight and hope that will soothe their nerves :smiley:
Cheers,
Jon