Bouncing cheques spoil it for bona-fide customers

On February 23 I had featured a case about bouncing cheques. The suppliers in question had adopted a policy not to accept payments by cheque. They wrote: "Unfortunately, like many other companies, we have had to stop accepting cheques", and added, "We regret that banks cannot help much when cheques bounce and the company has to bear the loss itself".

Bank of Valletta wrote: "Unfortunately, however, bank customers do occasionally issue cheques without having enough funds in their accounts. This constitutes unauthorised borrowing and, thus, a breach of the terms of agreement between the bank and its customer. On the other hand, if it results that a person is continually issuing cheques which cannot be honoured due to lack of funds, a bank will take steps to rectify the situation and this may include closing the account and withdrawal of any unused cheques".

I wrote that, in all fairness, the offending party in such transactions (i.e. bounced cheques) is the customer who presents a cheque without ensuring that there are enough funds in the account.

Subsequently I received the following letter:

May I congratulate you on your efforts in creating consumer awareness. I always read your informative column. I refer to your February 23 column, particularly the article on bouncing cheques.

I too have been bitten. In this case the sum involved was Lm3,520, and the bank in question was Bank of Valletta, Republic Street branch. However it is not an isolated case. The individual involved has established a track record of issuing bouncing cheques. Indeed, he is well known and both major banks - i.e. Bank of Valletta and HSBC - are aware of his track record.

In a separate letter I have given both banks full details of this individual's track record which I obtained from the law courts. In no uncertain terms this individual has a long list of court cases regarding bouncing cheques.

May I, through your column, highlight this issue and encourage other bitten consumers/individuals to join forces with an objective "to persuade banks to adopt a strict policy regarding this issue". There are many things that can be done such as blacklisting these fraudsters and naming them publicly. (Sebastian Muscat)

I agree. Such fraudsters ought to be publicly exposed for what they are. I would say this would be very much in line with the consumers' right to be informed. Mr Muscat copied in four banks - BoV, HSBC, APS, and Lombard. On March 18 I asked them for their comments and so far I have received a letter from BoV:

In the first place, please appreciate that, due to our duty of professional secrecy, we would not like to comment on a specific matter.

On the other hand, we feel that the bank's position has been clearly stated in our earlier correspondence. Indeed the content of the said correspondence should re-assure the public that the bank is not ignoring the matter. (E. Cachia, manager)

I also received the following note from Lombard Bank:

We acknowledge receipt of your communication dated March 18.

The matter is receiving our attention and we shall revert to you in due course. (G.R. Gusman, assistant general manager)

While looking forward to hearing from Lombard Bank, I hope to hear from APS, HSBC, and any other bank interested in a solution to this problem that needs addressing badly. As Mr Muscat aptly put it, we must highlight this issue. In this spirit I appeal to bitten consumers to write to me with ideas.

We have two types of victims here. We have those who, like Mr Muscat, were cheated to the tune of Lm3,520 and those who, like Marlene Schembri, are being denied the opportunity to use their cheque books.

We must build on their initiatives and join forces with a view to "persuade banks to adopt a strict policy regarding this issue". Yes, I agree with Mr Muscat. We talked about naming the individual whose Lm3,520 cheque bounced. He also sent me a list of cases involving this character.

At this point, if this person reads this article I appeal to him to write to me. In any case Mr Muscat gave me an address of his and I have sent him a letter. The problem is that we are not sure it is the right address and it is not my policy to name persons or organisations without having given them a fair opportunity to give me their side.

Finally, dear readers, I ask you to come up with ideas.