Off-line, you can bank on the delays

Five years ago the Consumers' Institute complained that the long time it took to clear a cheque belonged to the era of stagecoach deliveries.

Today, as electronic banking becomes even more sophisticated, little has changed.

The institute's latest survey of banks has again raised an age-old grizzle from customers.

They cannot understand why it takes four to five working days, and sometimes seven or more, to clear a cheque, even a cash cheque.

In Canada, cheques can be cleared overnight.

Here, a cheque generally still has to be physically seen and honoured - in part, because not all New Zealand banks have moved to image scanning cheques which, customers were told, would reduce delays. Consumers' Institute chief executive David Russell said yesterday: "I just can't see why they don't get their act together."

He said that in many other areas the banks had co-operated to ensure swift service.

He wondered whether the declining use of cheques was reducing the incentive for the banks to provide a better service.

"If they hang on for long enough, it's going to go away."

He said for a small businessman, operating on tight margins, the quick clearance of a cheque could be incredibly valuable.

Banking Ombudsman Liz Brown said her office continued to receive customer complaints about cheque clearance times. And she said customers could get in trouble if they did not realise the length of the delay and other payments were dishonoured.

Banks contacted yesterday offered little hop for a swift change to their systems.

Apparently one bank has yet to move to the computerised scanning of cheques - which the Government legalised several years ago in an effort to speed up clearance times.

And until it does, the other banks are unwilling to take on the risk of guaranteeing to honour all its cheques.

The Bankers' Association said customers could ask banks for a special service to clear a cheque quickly. The Consumers' Institute said that service usually came at a price - a fee of up to $25.