Bouncing cheques spoil it for bona fide consumers

I received an interesting message in response to last Sunday's piece on this issue:

Malta is a small country. Everyone knows who the fraudsters are. They are the same hundreds under different hats. It is ironic that banks do not know them. Banks should refuse a bad client.

When a person, in his personal name or as a signatory in a company, wishes to operate a cheque book, there should be clearance from all the banks or Bankers' Association. It is useless asking any professional to give a reference. The reference should come from the Bankers' Association.

This association should maintain a database of ID card numbers of persons who were responsible for dishonoured cheques. A fee is charged, on the issue of a certificate, to cover the expenses of this database. An alternative would be to create some form of co-operation between the banks and the Police Fraud Squad and/or the Court Registry.

During the first year, new customers, persons/companies should be given only one cheque book containing only 20 cheques. This means that the number of dishonoured cheques would be limited.

No more cheque books are issued when the number of dishonoured cheques exceeds five in one year. At this stage, even if the account is in credit, no more cheque books can be issued or the letter ®, showing an element of risk, is added to the account number.

A list should be provided in the branches or published periodically in newspapers or on the Internet by the Bankers' Association giving details of those accounts where cheques will not be honoured. By publishing a number, no one is being exposed. In this case the banks are simply putting to print what they do at their branches: cheques issued from these accounts shall be referred to drawer.

Bank secrecy and confidentiality exists to protect the good client not fraud. The legal saying is clear: fraud corrupts everything. In the application forms, the bank should undertake to report to third parties if the person concerned is unable to honour his cheques. In such an event, the bad client would be renouncing to all his rights, a priori.

Drastic action would mean that abuses would decrease. (Notary Dr Joseph Tabone, BA, LL.D., Mag.Jur.)

I thank Dr Tabone for his valid contribution. I do believe that his message makes sense. Yet again I look forward to receiving the banks' comments on the subjec.

I would be more than happy to feature, in this column, lists of those accounts where cheques will not be honoured. Indeed I agree with the idea of periodically featuring such lists in newspapers or on the Internet.