Cheque complaints rise, despite usage falling

Cheque complaints are on the rise despite their usage falling. Photo/Bevan Conley.

Complaints about cheques have risen in the last year despite their use more than halving since 2010.

Banking Ombudsman Nicola Sladden said it had 56 cases relating to cheques from July last year to April 30 compared to 37 cases the same prior period.

That's despite cheque usage falling from an average of 18 per person per year in 2010 to just eight per person last year.

"New Zealanders' use of cheques has more than halved in the past five years as electronic payments gain popularity, but complaints to us have risen in the past 12 months."

Sladden said the main cause of complaints were delays in processing cheques and failure of bank staff to act as instructed or promised.

But problems had also arisen because people still did not understand how to write a cheque to ensure the money went to the intended person.

Sladden said cheque writers needed to put "account payee only" or "not transferable" on the cheque to tell the bank it can deposit the money only into the account of the payee.

"Writing 'not negotiable' on a cheque merely means it can't be cashed. It doesn't stop it going into someone else's account. Nor does crossing out the words 'or bearer' prevent a thief from depositing a cheque."

She also urged recipients of cheques to bank them as soon as possible after a recent case in which a man complained after his bank failed to honour a cheque that was over 15 years old.

The man's investment account was closed while he was overseas and the cheque sent to his mother who eventually sent it on to the man who mislaid it.

He then found it 15 years later.

A person has six months from the date on the cheque to bank it.

After six months a cheque becomes "stale" and a bank is not required to honour it.

Cheque use
• Kiwis wrote an average of eight cheques per person last year
• For every cheque they made 51 electronic payments
• Cheque use has halved in the last five years