stolen cheque law and liability - HELP!

bottomdog

Our company (company A ) issued a cheque to Company B and the cheque got stolen in the post, the thief draws a line through the Company B's name on the cheque and writes his own name above it, and adds two initials

The theif presents it to his bank, the cashier ignores that fact that is a crossed cheque with two very large parallel lines
and lodges the cheque to the thief's account, the thief promptly withdraws the money and vanishes with out trace.

The cheque arrives to our bank ( Company A's bank ) and again the crossed lines are wrongly ignored and payment is made to the bank where the cheque was presented by the thief .

The money is withdrawn from our account, It is a four figure sum, so quite a lot of money.

What happens next is this.

The cheque is called back and we can all see it has been clearly crossed and falsely altered.

then the blame game starts

Our bank points the finger of blame at the bank where when cheque was lodged asking why did your cashier allow a crossed cheque by lodged to a person who it was not originally written out for.

The thief's bank points the finger of blame at our bank saying ' you should not have paid it either'. when we sent it to you you released the funds to us . so you also ignored the fact it was crossed.

Under the cheques act of 1958 Irish bankers are hugely protected for their own errors. Indeed the original act of Bill Of Exchange that governs cheques is very ambiguous as to assigning blame, it basically says the bank is responsible of it gets it wrong but is not liable . What ? yes it can mean anything . as the lawyer explained ' its a bit like saying I'll mind you kids and be responsible for them but I am not taking responsibility for them should anything happen - sort of.

we threaten the Ombudsman, the financial regulator, the Gardai, we are not childish enough to go the Joe Duffy route thank god.

Both banks join forces and say - mistakes happen - we are sorry for your trouble and we will assist the Gardai in catching the thief and hopefully the Gardai will help get your money back - but we the banks are not liable.

But we argue - the cheque was crossed and you both allowed a stranger to lodge it/clear it.

The banks reply - yes its an error but mistakes happen and our terms and conditions protect us from liability.

you can cross a cheque four ways

1 //
2 account Payee
3 and co
4 Not Negotiable

1 2 and 3 have no legal standing apparently we are told
4 has some strength over the others but also the banks are protected

The cheques act of ireland is full of protection clauses for the banks.

what the lawyers are saying is this, by crossing a cheque with or with our additional words of instruction 99.99% of the time a cashier would not dare lodge it or clear it. However if they do its tough luck but wait for it.......the bill of exchange law states the bank is liable - but does not say which bank -the clearing or the paying - the thief's bank or our bank, and the Cheqies Act sort of says bankers are not to blame for honest screw ups but might be HUH ?

THe ombudsman and Financial regulator were of no help to previous complainants so we have not engaged them yet.

There appears to be no legal precedent

and we are still without our money.

Can anyone give me some advice - what can we do?

My biggest question is which bank is to blame, the paying bank or the clearing bank ?

Or are they really protected by law, to be honest they seem to be as unsure as anyone, but still they refuse to pay.

The banks in question are AIB and Bank of Ireland, AIB is our bank.

Please advise

chopser

Go to a solicitor.

bottomdog

chopser wrote: »

Go to a solicitor.

Thank you but at this stage I know slightly more than a solicitor, I need someone who has more than basic knowledge

MagicSean

Go to the ombudsman or financial regulator

godtabh

bottomdog wrote: »

I need someone who has more than basic knowledge

And you are asking random boards members?

Pay some one who has the knowledge

bottomdog

godtabh wrote: »

And you are asking random boards members?

Pay some one who has the knowledge

The problem is nobody knows, the lawyers really don't know anything because the law is written in zodiac code, and is highly ambiguous, the bankers involved are not much better, there is no legal precedent I can find, I found a few people who went to the regulator and ombudsman who told them they really don't know either and come back in 30 days if its not resolved.

Its beginning to look more and more like, if your cheque is stolen and monies lodged, it's your loss, even if it's a crossed cheque, from one Ltd Company to another Ltd company and the bank were negligent. the law seems to indicate they are NOT liable for negligence, but its not a bulletproof law, so I am trying to find someone who knows something about it.

Predalien

If you are not going to engage a solicitor and are unlikely to get some sort of solution from either bank, then your only other option would seem to be through the financial ombudsman.

bottomdog

Predalien wrote: »

If you are not going to engage a solicitor and are unlikely to get some sort of solution from either bank, then your only other option would seem to be through the financial ombudsman.

The AIB ( our bank ) has agreed to cover the liability and put us in funds. This is only because of the uproar caused, and possibly because we are a very high profile company. The integrity of the banking system in Ireland is very shaky and the liability is also very unclear. If you are a large account - and we are, or high profile - as we are , they may pay up to avoid losing a customer or causing a battle royale over a few grand.

amen

ianal but first thing I would have asked is (maybe with a solicitors letter) is how many other crossed cheques have been cashed from the branches involved in Bank B and Bank A and how many from were processed by the same person in those branches? Maybe there is a pattern in which case the bank may be remiss in not correctly training their staff.

Kristopherus

Does the Bank who accepted the cheque and lodged it to the thief's a/c, know who the thief is? Surely its their responsibility to go after same thief and/or report him to the Gardai?