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Returned Cheque or Bill

banker, account, customer, received, usually and bankers

RETURNED CHEQUE OR BILL). A cheque may be returned unpaid for many reasons. The drawer may not have sufficient funds to meet it : he may be dead or bank rupt ; he may have instructed his banker not to pay it ; the banker may have received some legal notice preventing him from paying any further cheques upon the drawer's account ; or the cheque itself may not be in order, the date or the amount or other material part may have been altered, and not have been initialled by the drawer ; the amount in words and figures may differ ; the drawer's signature may not be recognised , an indorse ment may be wrong : it may be post-dated ; or crossed to two bankers ; or it may be stale through haying been issued so long. These are some of the principal reasons necessitating the return of a cheque.

When the cheque is returned an " answer " is marked upon it by the drawee banker, usually in the left-hand top corner. A number of the different " answers " which are in use are given in the article ANSWERS.

Where a cheque has been received for collection through the London Clearing House and is returned for any reason, it must, according to the rules of the Clearing House, be sent back direct, by return of post, to the country bank whose name and address appear upon it.

After settlement of a local exchange a cheque cannot strictly be returned later in the day, unless by agreement between the bankers.

Cheques received otherwise than through the Clearing House may be returned on the day following the receipt, but in practice they are usually returned on the same day. A bill may be held till the day after its due date, but it must be noted, when necessary, on the day of maturity. .\ cheque or bill cashed over the counter by the paying banker cannot subsequently be returned. When a bill is presented in the morning of its due date, a country banker is under no obligation to retain it till the close of busi ness before returning it, but there may he a local custom to retain it.

The banker to whom a cheque is returned for any reason, except a technical flaw in an indorsement, obtains his money again from the party from whom he received the cheque in the first place, delivering up the cheque itself in exchange. In the case of a faulty

indorsement (e.g. a cheque payable to " Thomas Cluff " indorsed " Thomas Clough ") which the collecting banker knows to be bond fide, it is customary for him to write on the back of the cheque " Indorse ment confirmed " or " Payee's (or John Smith's) indorsement confirmed," and his own signature. When the cheque is re presented, the drawee banker usually pays it ; he is not, however, in law bound to do so.

Bankers usually keep a list of all the cheques and bills they return unpaid, as well as a list of cheques and bills which have been returned to them, and in each case the reason of the " return " is noted in a column provided for the purpose.

When a cheque or bill is received back " dishonoured," unless it is delivered to the customer against cash, the banker charges his customer's account with the amount and sends the unpaid article to the customer. The notices of dishonour to indorsers will be given by the customer. Although not strictly necessary, some bankers require a cheque to be given by the customer to confirm the debit to his account for the returned bill or cheque, whilst other bankers take an acknowledgment from the customer on giving him the dishonoured instrument. If the customer's account will not admit of the dishonoured bill or cheque being charged to it, the amount should be debited to an account for returned articles and the banker should give notice to all parties. Any balance there may be in the customer's account may be held as a part payment.

A returned cheque may be debited to the account of the customer for whom it was sent for collection, even if not indorsed by him.

A banker usually cancels his indorsement on a returned bill. (See DISHONOUR OF BILL OF EXCHANGE.)