Dealing with an unpaid bounced cheque
Dealing With An Unpaid Bounced Cheque
Do you have customers that use cheques to pay for the services or goods you provide? Have you recently cashed a cheque, only to find out that it has bounced?
This is unfortunately a common occurrence for self-employed individuals. In recent years this has shown no signs of stopping.
In this article, our team of expert Private Debt Collectors have put together some tips for dealing with unpaid bounced cheques.
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The term ‘bounced’ is used when a bank cannot process a cheque due to issues with the payer’s account.
The validity of collecting an unpaid bounced cheque is relatively straightforward.
A cheque as viewed by the law to be the same as a cash payment. This means that it is still a legitimate promise to pay for the goods or services.
It has become less common to use cheques as a way of paying, due to the popularity of other payment methods.
With more and more companies choosing to use card payments or bank transfers, this has negated the need to use cheques.
There are still many larger organisations and people who will choose to pay using a cheque.
There are times when cheques bearing large amounts remain unpaid and are returned by the bank on which they are drawn.
There are three main pieces of evidence that will come from a payment failure from a bounced cheque.
These include the fact that you are owed money, how much you are owed and on what date the money is to be paid.
The Bills of Exchange Act 1882 is a UK Act of Parliament that concerns bills of exchange.
Drawers write “Bills of exchange” orders to the drawee to pay money to the payee.
The bill provides legislation for the occurrence of an unpaid cheque, whether it refers to a drawer or otherwise.
This means the issuer is indebted to the creditor for the sum stated on the respective cheque.
There are many reasons why a cheque can be “bounced”, including:
- Insufficient funds in the bank account
- The paying party cancels the cheque
- A technical reason, such as the cheque is not dated or signed
- Fraudulently used
It is knowing what to do should these cheques bounce, as you are rightfully owed the money that is due.
The recommended method for the collection of cheques that have bounced is through instructing a professional Private Debt Collection agency.
Unpaid Bounced Cheques – Debt Collection Action
The case of Esso Petroleum Co Ltd vs Milton back in 1997 decided that it was that a cheque and a direct debit mandate treated the same.
Namely, it was a promise to pay that should be honoured.
By not honouring the payment puts you, the creditor, in a good position when launching proceedings for debt collection.
This is due to the clear evidence that the amount is owed, despite how hard the debtor may try to dispute this.
A bounced cheque also means that the debtor cannot spuriously counterclaim against the creditor.
This is due to the cheque payment demonstrating the debtor’s earlier intention to pay the full amount of what is owed.
What To Include When Providing Evidence To The Debt Collection Agency
If you choose to instruct a Debt Collection Agency to carry out the recovery of your unpaid cheque, they will need evidence of the outstanding debt.
Here are all the relevant details that will need to be submitted as part of your claim:
- A copy of the bounced cheque or direct debit mandate
- The date of the cheque or direct debit mandate
- The account name
- The account number
- The sort code
- The value of cheque or failed direct debit payment
- The date of default
Any other background information that will assist the team of Debt Collectors will also be valid.
It is important to remember that you received a cheque for payment, meaning there is no excuse to seek the same value as per the cheque value.
This will also include any possible costs incurred as a result.
Choosing Frontline Collections To Recover Your Unpaid Bounced Cheque Debt
If you have read this article and are suffering from unpaid bounced cheques, it is time to get in contact with us. Our expert team of Private Debt Collectors at Frontline Collections can help.
We understand how frustrating this situation is and we are here to help, ensuring the maximisation of a successful result.
Our team of industry experts are able to help regardless of whether you are a private individual or a business.
Since 2005, we have operated the industry’s highest recovery rates which, complemented by our low commission rates.
This is to ensure those that are suffering from unpaid bounced cheques do not have to pay a large fee on top of that to get it recovered.