Multiple signatories and end of the cheque

Discussion in 'UK Finance' started by Reentrant, Nov 26, 2009.

  1. Reentrant

    Reentrant Guest

    There's been another round of press stories predicting the end of the
    cheque. That will hardly affect my personal finances, but I'm also the
    treasurer of a club which quite sensibly requires two designated
    signatories per cheque. I suspect this is normal for many organisations
    and maybe some suspicious (OK, prudent) married couples too.

    I'm not sure how this will work once cheques disappear.

    Are there (now or planned) online accounts that require two or more
    persons to authorise an online payment? eg one person initiates an
    online payment as normal, but all this does is email other signatories
    that a payment requires authorisation. Nothing happens until one of them
    logs on and confirms the transaction; only then does the payment go ahead.
    --
    Reentrant
     
    Reentrant, Nov 26, 2009
    #1
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  2. Reentrant

    Roger Mills Guest

    In an earlier contribution to this discussion,
    Reentrant <> wrote:

    > There's been another round of press stories predicting the end of the
    > cheque. That will hardly affect my personal finances, but I'm also the
    > treasurer of a club which quite sensibly requires two designated
    > signatories per cheque. I suspect this is normal for many
    > organisations and maybe some suspicious (OK, prudent) married couples
    > too.
    > I'm not sure how this will work once cheques disappear.
    >
    > Are there (now or planned) online accounts that require two or more
    > persons to authorise an online payment? eg one person initiates an
    > online payment as normal, but all this does is email other signatories
    > that a payment requires authorisation. Nothing happens until one of
    > them logs on and confirms the transaction; only then does the
    > payment go ahead.


    Not as far as I know. I had used to be the treasurer of an organisation
    whose cheques required two signatures. When I applied for on-line access to
    the account, the application form - signed by all the signatories - gave me
    authority to act on my own. No alternatives to this were offered.
    --
    Cheers,
    Roger
    ______
    Email address maintained for newsgroup use only, and not regularly
    monitored.. Messages sent to it may not be read for several weeks.
    PLEASE REPLY TO NEWSGROUP!
     
    Roger Mills, Nov 26, 2009
    #2
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  3. Reentrant wrote:

    > There's been another round of press stories predicting the end of the
    > cheque. That will hardly affect my personal finances, but I'm also the
    > treasurer of a club which quite sensibly requires two designated
    > signatories per cheque. I suspect this is normal for many organisations


    "Quite sensibly"? That's a load of rubbish. Everyone knows that
    this is completely impractical and that what tends to happen in
    practice is that a few (or even all) of the cheques in the treasurer's
    chequebook are signed in advance by one of the other signatories, and
    then the treasurer can get on with the day to day cheque writing
    unhampered. Of course this defeats the purpose of the requirement for
    dual authorisation, but in reality it just proves how pointless that
    requirement is. You can't operate a charity without trust, and to
    start from a position of presumed untrustworthiness of sole
    signatories is just plain wrong.

    The only other practical way to operate under such circumstances is
    for the treasurer (or whoever) to pay for stuff out of his own pocket
    (which may have been pre-stocked with a cash float) and get himself
    reimbursed periodically but infrequently by a "properly" co-signed
    cheque, the co-signatory having had the opportunity to scrutinise
    the treasurer's claimed outlays for genuineness.

    > I'm not sure how this will work once cheques disappear.


    Remember that cheques are not the only form of paper based payment.
    If/when cheques disappear, it therefore does not mean that paper
    based payment methods will disappear too. After all, not everyone
    has access to online banking facilities, so there is a need for
    paper systems to remain around.

    There is the giro transfer order, which is popular on the continent
    (or at least in Germany to my knowledge where it seems to have
    displaced cheques completely). Unlike a cheque (which you send to the
    payee, the payee then sends to his bank, which then sends it to your
    bank, which then releases the funds to his bank), which could be viewed
    as a "pull" order, giros are "push" orders (they contain the payee's
    and your own bank details, you send them to your bank, the bank then
    sends the funds to his bank where hey go directly into his account).

    Banks issue pre-printed giro forms in two varieties - one on which
    the account holder's details are pre-printed in the remitter section,
    and one where they are pre-printed in the payee section. The former
    are most like cheques, they are given to customers who want to *pay*
    bills. When someone sends them an invoice, this will contain the
    firm's bank details, the customer copies these onto the form together
    with a transaction reference, signs it, and sends it to his bank.
    The latter are issued to customers who want to *issue* bills. The
    invoice issuing firm can then further pre-print the form with the
    transaction reference and amount, and sends it with the invoice to
    the customer, who then adds his own account details, signs it, and
    sends it to his bank.

    Anyway, there is no reason why such giro orders could not bear
    two signatures.

    > Are there (now or planned) online accounts that require two or more
    > persons to authorise an online payment? eg one person initiates an
    > online payment as normal, but all this does is email other signatories
    > that a payment requires authorisation. Nothing happens until one of them
    > logs on and confirms the transaction; only then does the payment go
    > ahead.


    Yes, CAF Bank, owned by the Charities Aid Foundation and which specialises
    in offering banking facilities to charities, does indeed operate an
    online dual authorisation scheme. One signatory logs on and initiates
    the transaction, and when complete it goes into a suspended state until
    approved by another signatory. I don't think it automatically emails
    anyone, though, it is in any case probably more appropriate for the
    signatories to contatc each other independently of the bank, be it by
    email, by post, by phone, or indeed by the second signatory being
    actually present in the same room and ready to log in on the same
    computer as soon as the first has logged out.

    CAF Bank imposes a dual authorisation requirement for most transactions,
    so cheques *must* have two signatures. This is unlike most other banks
    who leave it up to the customer organisation whether they wish to have
    one, two, or any specific combination of signatories. Presumably none
    of this is actually ever checked except in the case of large amounts.
     
    Ronald Raygun, Nov 26, 2009
    #3
  4. Reentrant

    Rob Graham Guest

    Ronald Raygun wrote:
    > Reentrant wrote:
    >
    >> There's been another round of press stories predicting the end of the
    >> cheque. That will hardly affect my personal finances, but I'm also the
    >> treasurer of a club which quite sensibly requires two designated
    >> signatories per cheque. I suspect this is normal for many organisations

    >
    > "Quite sensibly"? That's a load of rubbish. Everyone knows that
    > this is completely impractical


    Hey, hang on! Don't dismiss this out of hand. There are plenty of
    organisations that require this. You seem to be looking at it from the
    standpoint of a charity or somesuch. I was the director of a company
    where we had set it up (it was prudent to do so because there were
    shareholders and who was going to explain to them that someone who we
    had all trusted had absconded with some money? They would quite rightly
    have said we were not fit for purpose).

    And you go on to make a lot of dogmatic statements about how these
    things should work. But not everyone wants to, or does, do it your way.


    Rob Graham
     
    Rob Graham, Nov 26, 2009
    #4
  5. Rob Graham wrote:

    > Ronald Raygun wrote:
    >> Reentrant wrote:
    >>
    >>> There's been another round of press stories predicting the end of the
    >>> cheque. That will hardly affect my personal finances, but I'm also the
    >>> treasurer of a club which quite sensibly requires two designated
    >>> signatories per cheque. I suspect this is normal for many organisations

    >>
    >> "Quite sensibly"? That's a load of rubbish. Everyone knows that
    >> this is completely impractical

    >
    > Hey, hang on! Don't dismiss this out of hand. There are plenty of
    > organisations that require this. You seem to be looking at it from the
    > standpoint of a charity or somesuch.


    Well, the OP provided the context of a club, and I extended it to
    charities or somesuch. Although I didn't explicitly say so, I meant
    it to apply to organisations which are so small, and the members so
    scattered, that it is impractical for two signatories to get together
    often enough to co-sign day-to-day cheques. It might increase the
    hassle involved for the signatories so much that no-one would
    volunteer to be one. It's often difficult enough to get folk to
    agree to serve on committees at all, even without this obstacle.

    > I was the director of a company
    > where we had set it up (it was prudent to do so because there were
    > shareholders and who was going to explain to them that someone who we
    > had all trusted had absconded with some money?...)


    You could explain to your shareholders that you had done a risk assessment
    and found the risk that a sole signatory would abscond with a significant
    sum of money to be acceptably low. You could have put in place a rule
    that two signatories are only needed in the case of cheques above a
    certain limit. No-one is likely to abscond untraceably, with everything
    that would be involved in disappearing completely and settling elsewhere
    with a new identity, unless the payoff is going to be worth it. It'd
    have to be millions, given that they'd have to fund their own retirement
    and say goodbye to their existing pension rights.

    However, I accept that in the context of a business with enough staff that
    two people whose job includes signing cheques are going to be getting
    together on a daily basis anyway, then my criticism does not apply, since
    it is entirely founded on the issue of practicality.

    Nevertheless, dual signing is no guarantee against fraud, it is only a
    little bit safer than single signing. For one thing it is possible that
    two signatories could conspire to defraud (admittedly this is not very
    likely, I just mention it because it's possible), but for another there
    are clearly limits on how much scrutiny a co-signatory can be expected
    to exercise when asked by the treasurer to "sign these four cheques
    please, they're for such-and-such and here are the invoices, OK?". If
    the treasurer is on the make, it's easy for him to slip in a bogus
    invoice.

    > And you go on to make a lot of dogmatic statements about how these
    > things should work. But not everyone wants to, or does, do it your way.


    More pragmatic than dogmatic I think. I wasn't saying how things
    *should* work, but how they *can and do* work, in a context where
    meetings between co-signatories would be inconvenient unless very
    infrequent. Alternatively, I suppose it might be possible to "meet"
    by post; the treasurer could write and sign some cheques, and post them
    to someone else for co-signature together with a convincing explanation
    of what they were for, but this still does not eliminate the possibility
    of deception of the co-signatory by the treasurer.

    I write from experience. I am treasurer of two small charities. One
    of them has a single signature bank mandate, and in principle I could
    easily steal £200k, but I couldn't afford to disappear for that. The
    other has a dual signing requirement, but my whole chequebook has been
    pre-signed by the chairman. The most I could steal here is less than
    £10k. This freedom makes my work so much easier than having to make
    special arrangements to get every single cheque co-signed, that I can't
    imagine working without that freedom. Were it taken away, I would find
    it too much hassle and I would refuse to act as treasurer (or indeed as
    co-authoriser).
     
    Ronald Raygun, Nov 26, 2009
    #5
  6. Reentrant

    Reentrant Guest

    Ronald Raygun wrote:
    > Rob Graham wrote:
    >
    >> Ronald Raygun wrote:
    >>> Reentrant wrote:
    >>>
    >>>> There's been another round of press stories predicting the end of the
    >>>> cheque. That will hardly affect my personal finances, but I'm also the
    >>>> treasurer of a club which quite sensibly requires two designated
    >>>> signatories per cheque. I suspect this is normal for many organisations
    >>> "Quite sensibly"? That's a load of rubbish. Everyone knows that
    >>> this is completely impractical

    >> Hey, hang on! Don't dismiss this out of hand. There are plenty of
    >> organisations that require this. You seem to be looking at it from the
    >> standpoint of a charity or somesuch.

    >
    > Well, the OP provided the context of a club, and I extended it to
    > charities or somesuch. Although I didn't explicitly say so, I meant
    > it to apply to organisations which are so small, and the members so
    > scattered, that it is impractical for two signatories to get together
    > often enough to co-sign day-to-day cheques. It might increase the
    > hassle involved for the signatories so much that no-one would
    > volunteer to be one. It's often difficult enough to get folk to
    > agree to serve on committees at all, even without this obstacle.
    >
    >> I was the director of a company
    >> where we had set it up (it was prudent to do so because there were
    >> shareholders and who was going to explain to them that someone who we
    >> had all trusted had absconded with some money?...)

    >
    > You could explain to your shareholders that you had done a risk assessment
    > and found the risk that a sole signatory would abscond with a significant
    > sum of money to be acceptably low. You could have put in place a rule
    > that two signatories are only needed in the case of cheques above a
    > certain limit. No-one is likely to abscond untraceably, with everything
    > that would be involved in disappearing completely and settling elsewhere
    > with a new identity, unless the payoff is going to be worth it. It'd
    > have to be millions, given that they'd have to fund their own retirement
    > and say goodbye to their existing pension rights.
    >
    > However, I accept that in the context of a business with enough staff that
    > two people whose job includes signing cheques are going to be getting
    > together on a daily basis anyway, then my criticism does not apply, since
    > it is entirely founded on the issue of practicality.
    >
    > Nevertheless, dual signing is no guarantee against fraud, it is only a
    > little bit safer than single signing. For one thing it is possible that
    > two signatories could conspire to defraud (admittedly this is not very
    > likely, I just mention it because it's possible), but for another there
    > are clearly limits on how much scrutiny a co-signatory can be expected
    > to exercise when asked by the treasurer to "sign these four cheques
    > please, they're for such-and-such and here are the invoices, OK?". If
    > the treasurer is on the make, it's easy for him to slip in a bogus
    > invoice.
    >
    >> And you go on to make a lot of dogmatic statements about how these
    >> things should work. But not everyone wants to, or does, do it your way.

    >
    > More pragmatic than dogmatic I think. I wasn't saying how things
    > *should* work, but how they *can and do* work, in a context where
    > meetings between co-signatories would be inconvenient unless very
    > infrequent. Alternatively, I suppose it might be possible to "meet"
    > by post; the treasurer could write and sign some cheques, and post them
    > to someone else for co-signature together with a convincing explanation
    > of what they were for, but this still does not eliminate the possibility
    > of deception of the co-signatory by the treasurer.
    >
    > I write from experience. I am treasurer of two small charities. One
    > of them has a single signature bank mandate, and in principle I could
    > easily steal £200k, but I couldn't afford to disappear for that. The
    > other has a dual signing requirement, but my whole chequebook has been
    > pre-signed by the chairman. The most I could steal here is less than
    > £10k. This freedom makes my work so much easier than having to make
    > special arrangements to get every single cheque co-signed, that I can't
    > imagine working without that freedom. Were it taken away, I would find
    > it too much hassle and I would refuse to act as treasurer (or indeed as
    > co-authoriser).
    >

    In our case the fact that I don't get pre-signed cheques (well,
    sometimes the amount is left blank but the payee is always filled in)
    means the club are happy not to have the accounts formally audited,
    which makes my life a lot easier.

    I agree needing two signatories is far from convenient, but it "feels
    right" when dealing with money that's not mine. That's important for
    volunteers (honest ones, anyway).

    --
    Reentrant
     
    Reentrant, Nov 26, 2009
    #6
  7. Reentrant

    Rob Graham Guest

    Ronald Raygun wrote:
    > Rob Graham wrote:
    >
    >> Ronald Raygun wrote:
    >>> Reentrant wrote:
    >>>
    >>>> There's been another round of press stories predicting the end of the
    >>>> cheque. That will hardly affect my personal finances, but I'm also the
    >>>> treasurer of a club which quite sensibly requires two designated
    >>>> signatories per cheque. I suspect this is normal for many organisations
    >>> "Quite sensibly"? That's a load of rubbish. Everyone knows that
    >>> this is completely impractical

    >> Hey, hang on! Don't dismiss this out of hand. There are plenty of
    >> organisations that require this. You seem to be looking at it from the
    >> standpoint of a charity or somesuch.

    >
    > Well, the OP provided the context of a club, and I extended it to
    > charities or somesuch. Although I didn't explicitly say so, I meant
    > it to apply to organisations which are so small, and the members so
    > scattered, that it is impractical for two signatories to get together
    > often enough to co-sign day-to-day cheques. It might increase the
    > hassle involved for the signatories so much that no-one would
    > volunteer to be one. It's often difficult enough to get folk to
    > agree to serve on committees at all, even without this obstacle.
    >
    >> I was the director of a company
    >> where we had set it up (it was prudent to do so because there were
    >> shareholders and who was going to explain to them that someone who we
    >> had all trusted had absconded with some money?...)

    >
    > You could explain to your shareholders that you had done a risk assessment
    > and found the risk that a sole signatory would abscond with a significant
    > sum of money to be acceptably low. You could have put in place a rule
    > that two signatories are only needed in the case of cheques above a
    > certain limit. No-one is likely to abscond untraceably, with everything
    > that would be involved in disappearing completely and settling elsewhere
    > with a new identity, unless the payoff is going to be worth it. It'd
    > have to be millions, given that they'd have to fund their own retirement
    > and say goodbye to their existing pension rights.
    >
    > However, I accept that in the context of a business with enough staff that
    > two people whose job includes signing cheques are going to be getting
    > together on a daily basis anyway, then my criticism does not apply, since
    > it is entirely founded on the issue of practicality.
    >
    > Nevertheless, dual signing is no guarantee against fraud, it is only a
    > little bit safer than single signing. For one thing it is possible that
    > two signatories could conspire to defraud (admittedly this is not very
    > likely, I just mention it because it's possible), but for another there
    > are clearly limits on how much scrutiny a co-signatory can be expected
    > to exercise when asked by the treasurer to "sign these four cheques
    > please, they're for such-and-such and here are the invoices, OK?". If
    > the treasurer is on the make, it's easy for him to slip in a bogus
    > invoice.
    >
    >> And you go on to make a lot of dogmatic statements about how these
    >> things should work. But not everyone wants to, or does, do it your way.

    >
    > More pragmatic than dogmatic I think. I wasn't saying how things
    > *should* work, but how they *can and do* work, in a context where
    > meetings between co-signatories would be inconvenient unless very
    > infrequent. Alternatively, I suppose it might be possible to "meet"
    > by post; the treasurer could write and sign some cheques, and post them
    > to someone else for co-signature together with a convincing explanation
    > of what they were for, but this still does not eliminate the possibility
    > of deception of the co-signatory by the treasurer.
    >
    > I write from experience. I am treasurer of two small charities. One
    > of them has a single signature bank mandate, and in principle I could
    > easily steal £200k, but I couldn't afford to disappear for that. The
    > other has a dual signing requirement, but my whole chequebook has been
    > pre-signed by the chairman. The most I could steal here is less than
    > £10k. This freedom makes my work so much easier than having to make
    > special arrangements to get every single cheque co-signed, that I can't
    > imagine working without that freedom. Were it taken away, I would find
    > it too much hassle and I would refuse to act as treasurer (or indeed as
    > co-authoriser).
    >


    OK Ron, I'll let you off this time.

    Rob.
     
    Rob Graham, Nov 26, 2009
    #7
  8. Reentrant wrote:

    > In our case the fact that I don't get pre-signed cheques (well,
    > sometimes the amount is left blank but the payee is always filled in)
    > means the club are happy not to have the accounts formally audited,
    > which makes my life a lot easier.


    What do you mean by "formally audited"? You do have to prepare annual
    account summaries for your club's AGM, I take it. Do you not have to
    have these even informally checked by someone?

    Even honest people can make mistakes, and getting someone to check
    the accounts, even if not by means of a "formal audit", is always a
    good idea, especially when you've made a mistake, the books don't
    balance, and you can't figure out why. Often the checker can help
    you find where the mistake is.

    > I agree needing two signatories is far from convenient, but it "feels
    > right" when dealing with money that's not mine. That's important for
    > volunteers (honest ones, anyway).


    I respect your opinion but I disagree with it. To me it would not feel
    right to work under a requirement which not only implicitly casts doubt
    on my honesty, but which also makes the job more inconvenient than it
    needs to be, for what little safeguard it offers. I suggest this
    safeguard is so weak that it's next to useless. If I really wanted to
    embezzle funds, I'm sure I could do so even with a dual signing arrangement
    in place. I would either work out how to fool the other signatory, or I
    would intercept money on the way in to the bank rather than on the way out.
     
    Ronald Raygun, Nov 26, 2009
    #8
  9. Rob Graham wrote:

    > OK Ron, I'll let you off this time.


    Gosh, you were easier to convince than I thought. Make a note
    to yourself never to volunteer to be co-signatory of a club! :)
     
    Ronald Raygun, Nov 26, 2009
    #9
  10. Reentrant

    Robin Graham Guest

    Ronald Raygun wrote:
    > Rob Graham wrote:
    >
    >> OK Ron, I'll let you off this time.

    >
    > Gosh, you were easier to convince than I thought. Make a note
    > to yourself never to volunteer to be co-signatory of a club! :)
    >


    Ah no. You misunderstand me. I wouldn't follow your precepts, but I'll
    allow that you have a point in some circumstances.
     
    Robin Graham, Nov 26, 2009
    #10
  11. Reentrant

    Mouse Guest

    On 26 Nov, 09:25, Reentrant <> wrote:
    > There's been another round of press stories predicting the end of the
    > cheque. That will hardly affect my personal finances, but I'm also the
    > treasurer of a club which quite sensibly requires two designated
    > signatories per cheque. I suspect this is normal for many organisations
    > and maybe some suspicious (OK, prudent) married couples too.
    >
    > I'm not sure how this will work once cheques disappear.
    >
    > Are there (now or planned) online accounts that require two or more
    > persons to authorise an online payment? eg one person initiates an
    > online payment as normal, but all this does is email other signatories
    > that a payment requires authorisation. Nothing happens until one of them
    >   logs on and confirms the transaction; only then does the payment go ahead.
    > --
    > Reentrant


    I don't know if this is still available, but about 8 years ago I
    worked for a partnership that had a business account with Barclays.
    Barclays installed some software on a couple of PCs (they sent a guy
    round for an afternoon), and the effect was that one person had to log
    into one of the PCs and set up the payments on the online account, and
    the second person had to log into the second PC and authorise the
    payments.

    At the time it struck me as pretty labour intensive for Barclays to be
    sending people round to install software on their customers' PCs, and
    I seem to remember it was some sort of trial. The partnership was
    pretty small - two partners, and about thirty employees - but
    presumably made enough payments for Barclays to bother with the
    personal touch.

    (Whole system was completely useless, because one of the partners kept
    announcing that he 'trusted me' and giving me his logins and asking me
    to log in to the second PC as him and authorise the payments I had set
    up. We had a merry-go-round where I kept refusing and making him
    change his passwords - which he promptly forgot - but I eventually
    managed to persuade the other partner to do the authorising. I had no
    intention whatsoever of stealing from them, but rather like the OP I'm
    uncomfortable about having unfettered access to other people's money).

    The OP might want to approach the charity's current bankers, and ask
    them whether they have such a system.
     
    Mouse, Nov 26, 2009
    #11
  12. Ronald Raygun wrote:

    > I respect your opinion but I disagree with it. To me it would not feel
    > right to work under a requirement which not only implicitly casts doubt
    > on my honesty, but which also makes the job more inconvenient than it


    But suggesting that checks cast doubt on their honesty is exactly the
    sort of social engineering that a socioopathic fraudster would use.

    Also changes made for convenience are exactly what causes
    anti-fraud/fire safety/security measures to be compromised.
     
    David Woolley, Nov 27, 2009
    #12
  13. Reentrant

    Reentrant Guest

    Ronald Raygun wrote:

    >
    > What do you mean by "formally audited"?


    Going round to a retired accountant's house with a years worth of
    paperwork, drinking weak tea, being pestered by his bloody cats, and
    eventually getting his sign-off on a piece of paper.

    But that's not the main issue. All I was really pointing out is that
    with cheques, the banks offer a both-to-sign option (which is sort-of
    justified in http://www.bba.org.uk/content/1/c6/01/45/51/jointacc.pdf)
    and I'm interested to know how or if this will be implemented in online
    banking after cheques disappear.
    --
    Reentrant
     
    Reentrant, Nov 27, 2009
    #13
  14. Reentrant wrote:

    > Ronald Raygun wrote:
    >>
    >> What do you mean by "formally audited"?

    >
    > Going round to a retired accountant's house with a years worth of
    > paperwork, drinking weak tea, being pestered by his bloody cats, and
    > eventually getting his sign-off on a piece of paper.


    Well, get the paperwork all up to scratch in a nice lever arch file,
    take it round to him, but explain that you're allergic to cats so you
    can't come in, and leave the stuff with him to get on with it. Tell
    him to phone you if he has any queries. If you've done your job
    properly there won't be any. If there are, invite him round, serve
    him strong tea, and let him be pestered by your dogs.

    Or consider getting them "informally" audited. Basically the same
    procedure but with the person in question not necessarily being a
    qualified accountant.

    Frankly, I'm aghast at the very thought that the membership or committee
    would accept dual signing as an alternative to at least an informal audit.

    > But that's not the main issue. All I was really pointing out is that
    > with cheques, the banks offer a both-to-sign option (which is sort-of
    > justified in http://www.bba.org.uk/content/1/c6/01/45/51/jointacc.pdf)
    > and I'm interested to know how or if this will be implemented in online
    > banking after cheques disappear.


    Understood.
     
    Ronald Raygun, Nov 27, 2009
    #14
  15. David Woolley wrote:

    > Ronald Raygun wrote:
    >
    >> I respect your opinion but I disagree with it. To me it would not feel
    >> right to work under a requirement which not only implicitly casts doubt
    >> on my honesty, but which also makes the job more inconvenient than it

    >
    > But suggesting that checks cast doubt on their honesty is exactly the
    > sort of social engineering that a socioopathic fraudster would use.


    Well, OK, I'll concede that.

    > Also changes made for convenience are exactly what causes
    > anti-fraud/fire safety/security measures to be compromised.


    True, but I suggest that's how it should be. The job of such measures
    is to reduce risk, not eliminate it. I suggest that where such measures
    get seriously in the way of life, then they've gone too far. The rule
    that prevention is better than cure is only true while the cost of
    prevention is reasonable.
     
    Ronald Raygun, Nov 27, 2009
    #15
  16. Reentrant

    MJA Guest

    End of the cheque and giro transfers (was: Re: Multiple signatoriesand end of the cheque)

    On 2009-11-26, Ronald Raygun <> wrote:
    > Reentrant wrote:
    >
    >> There's been another round of press stories predicting the end of the
    >> cheque.

    >
    > Remember that cheques are not the only form of paper based payment.
    > If/when cheques disappear, it therefore does not mean that paper
    > based payment methods will disappear too. After all, not everyone
    > has access to online banking facilities, so there is a need for
    > paper systems to remain around.
    >
    > There is the giro transfer order, which is popular on the continent
    > (or at least in Germany to my knowledge where it seems to have
    > displaced cheques completely). Unlike a cheque (which you send to the
    > payee, the payee then sends to his bank, which then sends it to your
    > bank, which then releases the funds to his bank), which could be viewed
    > as a "pull" order, giros are "push" orders (they contain the payee's
    > and your own bank details, you send them to your bank, the bank then
    > sends the funds to his bank where hey go directly into his account).
    >
    > Banks issue pre-printed giro forms in two varieties - one on which
    > the account holder's details are pre-printed in the remitter section,
    > and one where they are pre-printed in the payee section. The former
    > are most like cheques, they are given to customers who want to *pay*
    > bills. When someone sends them an invoice, this will contain the
    > firm's bank details, the customer copies these onto the form together
    > with a transaction reference, signs it, and sends it to his bank.
    > The latter are issued to customers who want to *issue* bills. The
    > invoice issuing firm can then further pre-print the form with the
    > transaction reference and amount, and sends it with the invoice to
    > the customer, who then adds his own account details, signs it, and
    > sends it to his bank.


    As far as I know, countries which have discontinued national cheque
    clearing still have some sort of paper based giro transfer system as
    described by Ronald Raygun.

    The UK has never really embraced giro transfers. There was National
    Girobank, now taken over by Alliance and Leicester. There are also
    bank giro credit slips, but the payer has either to pay in cash, or to
    write a cheque to accompany the bank giro credit slip.

    Since January 1st 1998 banks only accept bank giro credits pre-printed
    with the account details of the payee for inter-bank transfers. Gone
    from the counter are the blank giro credit forms that could be filled
    in by hand. One or two banks such as HSBC still accept bank giro
    credit slips with the payee's details written in manuscript, but only
    for payment into HSBC/First Direct accounts.

    Personally, I think it unlikely that the banker's clearing house will
    introduce a new form of paper based clearing for continental style
    giro transfers, and I would expect bank giro credit clearing to
    disappear at the same time as cheque clearing.

    Yes, I am worried about the lack of alternatives. My mother is in a
    nursing home and organises her finances by post. She has no internet
    access, is too hard of hearing to use telephone banking, and cannot
    easily travel to a bank branch.

    Maybe some banks will continue to offer cheques, but set up reciprocal
    agreements with other banks rather than using a centralised clearing
    system as now. That was what the building societies used to do when
    they were not members of the banker's clearing house, and what is done
    in the USA by smaller banks.

    Regards,

    MJA
     
    MJA, Nov 30, 2009
    #16
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