Our client, for ease let’s call them Acme Trading Ltd (*) issued a cheque to A.N Other Ltd (*) for £20,000. This was then sent by first class post as most cheques are, when the cheque never arrived A.N.Other contacted and chased Acme for their money, following investigations it was found that it had been cashed already.
The cheque had been intercepted by a third party who then managed to open an account in the name of the company via Lloyds TSB and deposited the cheque, the funds were then (presumed) to be withdrawn.
Now you would think this wouldn’t have been too much of an issue with our banking system, the blame must lie with someone? Acme contacted their Bank who produced a copy of the cheque which was unaltered, so not their problem, the Bank then contacted Lloyds who confirmed it had been paid into an account named A.N.Other ( The real A.N.Other actually bank with Natwest). Lloyds then could not confirm anymore due to Data Protection and were closing their files.
Not so surprising that the banks weren’t helpful. The Financial Ombudsman stated that they couldn’t get involved as Acme had no issue with their own Bank and have no contract with Lloyds.
The Police initially said you need to report it at the station nearest to where it was paid into, having done so the local station said it was a civil matter, even though A.N.Other denied they had any accounts with Lloyds and were a large corporation.
So Acme are now out of pocket to the tune of £20,000, A.N.Other still need to be paid, the customers Bank have washed their hands of it and Lloyds are hiding behind Data Protection and will not refer it to their fraud department. Finally, the Police are refusing to deal with as it’s a civil matter although the client is pursuing this further. Additionally, A.N.Other still need to be paid.
Go on pay you next invoice by cheque I dare you!
A scary story on how to lose money and seemingly have no re-courses to anyone. Cheques are an institution in the UK slowly being replaced by payments online, however, a number of companies are still retaining the old method.
(*) Names are a fictitious and do not relate to any company past or present.