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OFT welcomes changes to cheque clearing process

167/07    30 November 2007

The OFT welcomes changes made to the cheque clearing process, which will provide certainty and increased transparency for business and personal customers paying in cheques.

The changes, introduced following agreement by the Payment Systems Task Force chaired by the OFT, are a significant step forward for any consumer who pays into their bank account a cheque, banker's draft or building society cheque.

For the first time, consumers across the UK, including Northern Ireland, will know that after six working days money paid to them by cheque cannot be taken out of their account as a result of the cheque being dishonoured. After two working days customers will start to earn interest on money deposited via cheque, or if in overdraft have their balance reduced. They will be able to withdraw money against cheques deposited after four working days (six for savings accounts). This was a major achievement for the Task Force and makes the UK a world leader in the area. The OFT expects to see banks and building societies competing to beat these maximum limits, as some already do.

Jonathan May, OFT's Executive Director Policy and Strategy, who chaired the Task Force, said:

'I am very pleased that these changes are now being introduced, in the way the Task Force wanted, and to the agreed timetable. They are a major step forward for users of cheques, especially that they will now have the security of knowing that money cannot be taken back from their account after six days.'

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