New system needed for chequing

30 November -0001

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With many banks taking up to four days to clear a cheque, and some taking up to a week, it's about time there was in investigation into the way cheques are dealt with.

Almost everyone has become overdrawn because a cheque has not cleared in time, and had to pay a penalty - Usually around £20 or £30, which, even if it isn't a major sting, is still money that could have been spent elsewhere.

Now the The Office of Fair Trading is ordering a taskforce to clean up the way cheques are paid into bank accounts and speed up the whole system.

According to Ed Mayo, chief executive of the National Consumer Council; "A donkey could deliver cheques faster than banks can put money into customers' accounts.

"There are 6.5m cheques issued every working day, so the system needs to work speedily for everyone."

The problem was identified 5 years ago, but the OFT has allowed the banking industry to delay improvements.

The taskforce will present it's proposals for improvements as early as next summer, but it will be at least 2008 before any changes are seen. Mr Mayo said " 'Consumers' patience is fast running out and could be totally exhausted by the time these plans come to fruition,"

Eddy Weatherill, founder of the consumer pressure group the Independent Banking Advisory Service, said: 'The way the banks have twisted and turned on this issue is a scandal. They have delayed all attempts to speed up cheque processing.

'There is absolutely no justification for the delays. This is just another example of pure greed by the banks. They make money by slowing processing and clearing, so it is not in their interest to do anything about it.'

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