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Key Payment Questions

Within this section we have complied a list of the most frequently asked questions sent to our public enquiries email inbox and our subsequent advice.

If you have a payments question, please email for our advice.

Topics (click to move to topic area):


Can a cheque be paid into the account of someone other then the named payee?

Most cheques are crossed a/c payee.  The Cheques Act 1992.  Section 1 amended Section 81 of the Bills of Exchange Act 1882 (introducing a new Section 81A) gives statutory power to the "a/c payee" crossing when it is used.

The law regarding "a/c payee" legislation is very clear.  A cheque which bears the "a/c payee" crossing can only be paid into an account in the name of the beneficiary exactly as it appears on the cheque.  Similarly, a cheque payable to two beneficiaries can only be paid into an account in the name of the two beneficiaries exactly as it appears on the cheque.

Is it true that a cheque is only valid for six months?

A cheque is valid for as long as the debt between the two parties (i.e. issuer and payee) exists.  In other words, cheques do not have an expiration date.

Notwithstanding the above, it is common banking practice to reject a cheque presented for payment bearing a date more than six months earlier to protect the payer, on the basis that payment may already have been made by some other means or the cheque may have been lost or stolen.  However this is at the discretion of individual banks. 

However, where there is a dispute, a cheque remains legally valid in order to prove a debt for a period of six years, which is the Statute of Limitations.

Why do Foreign Cheques take so long to clear?

There is no overseas cross-border cheque clearing system in operation and so cheques in a foreign currency must be returned to the country where they were drawn in order to be cleared.

It is difficult for a bank to know how long it will take for these types of cheques to clear so they will normally advise customers of an estimated time scale, as this process often takes several weeks and involves charges as it done on a cheque by cheque basis.  This process is called collection and if a cheque is in a foreign currency there will be a charge for converting it into sterling.

How long does a UK Cheque take to clear?

There have been changes to cheque clearing regarding certainty of funds, but for most people the clearing itself will not be any quicker than usual.  The central clearing cycle is still 3 days, but there are now latest times after which you can earn interest, and then withdraw your money. After that there is also then a fixed time after which you can be certain that the money is yours.

These are described as the 2-4-6 rules and more information can be found here.

Day 0 (the day you pay in your cheque) +2 for when you earn interest, +4 for when you can withdraw your money, and +6 for when it is definitely yours, unless you are a knowing party to a fraud.


Can a CHAPS Payment be cancelled?

CHAPS payments take place on the same day, and are irrevocable once the funds have been transferred, they cannot be recalled. The payer has to request that their bank makes this type of payment for them, and there is a fee for this.

How can I become a member of CHAPS?

Membership criteria can be found on the CHAPS website.

Faster Payments Service

Are the value limits listed for the various banks per day or per transaction?

The value limits shown here are applied by the sending bank for each individual transaction and they are not aggregated in any way whatsoever, i.e. either by recipient and/or timescale. Consequently, you can send as many payments as you wish within a day provided each is within the value limit being applied by the sending bank.

However, we would note that a high number of payments within a relatively short period of time might attract the bank's attention. In this event, additional security checks may be carried out which could slow down receipt of a payment which would otherwise arrive within a couple of hours.

Which UK banks are currently members of the Faster Payments Service?

A  list of all the banks which are currently participating together with the value limits can be found here.

Plastic Cards

Is a retailer allowed to refuse a credit card that does not have Chip and Pin?

Provided the card being presented is badged with one of the major card scheme brands (e.g. Visa and MasterCard) and the retailer accepts such cards, then they should accept a card whether it is Chip and PIN or not.  In the overwhelming majority of cases the reason why a retailer does not accept a non-chip and PIN is because there staff have not been sufficiently trained, or have been misinformed by their manager, or head office.

Our advice to cardholders when faced with a retailer saying that 'we do not accept your non-chip and PIN card' is that they insist that the card is inserted in the Chip and PIN terminal and the terminal will then advise them what they should do next.  If there is no chip on the card, then the terminal should request a magnetic strip swipe and a receipt will be printed for signature.


I believe that I have become a victim of Identity Fraud – what should I do?

If you are concerned that you may have become a victim of Identity Fraud, you might wish to obtain a copy of your credit report from one of the credit reference agencies. They are Call Credit (0870 060 1414), Equifax (0870 010 0583) and Experian (0870 241 6212). You may also like to get in touch with CIFAS, the UK's fraud prevention service, who for a fee of about £11 can earmark your name and address - you will then be notified if anyone tries to obtain credit using those details (tel. 0870 010 2091).

I would also refer you to the Financial Fraud Action website where you will find more information on Identity Fraud