tag:blogger.com,1999:blog-7115935.post8667501080219317143..comments2023-12-01T11:40:00.045+11:00Comments on Dikkii's Diatribe: Dikkii's financial tips #5: How the hell do cheques work?Dikkiihttp://www.blogger.com/profile/07897381809885423712noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-7115935.post-64617761533429898302007-06-25T01:36:00.000+10:002007-06-25T01:36:00.000+10:00Plonka, cheques really shouldn't exist anymore - t...Plonka, cheques really shouldn't exist anymore - they are just too complicated and clunky.<BR/><BR/>In this day and age, where we have internet facilities where we can transmit a transaction over the internet without this costly process, we really should be phasing them out.<BR/><BR/>Sounds like you've stuck up a new post. I must check it out.Dikkiihttps://www.blogger.com/profile/07897381809885423712noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-41733890444063827362007-06-22T14:18:00.000+10:002007-06-22T14:18:00.000+10:00I don't seem to be able to find anything "official...I don't seem to be able to find anything "official" about the term "insufficient funds", just more arguments like this one, interesting...<BR/><BR/>Still, it is a complex way to go about moving money around and as I said, I can see your points, especially where you have huge numbers to process.<BR/><BR/>Now, go read all about UFO's and aliens, as they pertain to religion...:)Plonkahttps://www.blogger.com/profile/01552546816593027504noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-90159817029130388792007-06-22T13:39:00.000+10:002007-06-22T13:39:00.000+10:00G'day Plonka, But that said, "insufficient funds" ...G'day Plonka,<BR/> <BR/><I>But that said, "insufficient funds" is <B>not</B> considered a breach of privacy. There is absolutely <B>no</B> information about you in that statement, other than you may have used the wrong account. </I><BR/><BR/>(Your emphasis)<BR/><BR/>I'm a bit shocked by this. Back in the day, when I worked at the bank, the phrase "insufficient funds" meant exactly that.<BR/><BR/>If someone came in to cash a cheque and we couldn't do it, we were expressly told that this was one of the things that you could not tell a third party, because it meant only one thing:<BR/><BR/><B>The drawer of this cheque has insufficient funds in their account. </B><BR/><BR/>Having a think about that now in light of what you've written, and I still agree with that sentiment. You are telling a third party something about an account that you've tried to process a debit to.<BR/><BR/>Glad that they say something like "transaction denied". There could be any reason for that message.<BR/><BR/><I>That's what your ATM spits out at you [insufficient funds]when you don't have enough in there and it's printed on thousands of disgarded bits of paper daily.</I><BR/><BR/>Yes, but my recollection is that there is nothing that links this message to your account name or number, either on the receipt, the duplicate receipt roll or the machine's hard drive. Correct me if I'm wrong.<BR/><BR/><I>I tend to lean over and grab it before I enter my pin while regailing them with the filthiest look I can manage...:)</I><BR/><BR/>Good work, Plonka. Sounds like shop assitants need basic lessons in privacy before they start processing EFTPOS transactions.<BR/><BR/><I>In fact, I think it's more insipid that way because both teh shop assistant and anyone in line with you will immediately assume you don't have enough money when it may well be that you've just miscalculated your daily withdrawal limit... </I><BR/><BR/>So let them assume? It's not like they're correct, or anything.<BR/><BR/>As Snake Plissken (Kurt Russell) said in escape from New York, "Assumption is the mother of all fuck-ups."<BR/><BR/>By the way, a yes or no answer would be good when depositing a cheque, but could you imagine doing this with 10 or 20?<BR/><BR/>This is the reality about cheque deposits - the system is designed to cater for business and not personal depositors.<BR/><BR/>We used to have a largish real estate agent come into the bank every day with around 70-80 cheques each day.<BR/><BR/>It was bad enough that they got us to count them to see that they matched with their list. Normally in this situation, we wouldn't.<BR/><BR/>Keying each of these in one by one would be a nightmare.<BR/><BR/>Also, quite a lot of depositors like to use the quick deposit box...Dikkiihttps://www.blogger.com/profile/07897381809885423712noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-57133424387767152412007-06-22T09:36:00.000+10:002007-06-22T09:36:00.000+10:00looks at the balance in the drawers bank account i...<I>looks at the balance in the drawers bank account if a cheque is crossed</I><BR/><BR/>(We all have our favourites, and I think she is...:))<BR/><BR/>More rules and therein lies the problem, as I've already said.<BR/><BR/>But that said, all she really is, is the <B>facilitator</B> of a transacion between you and I, she isn't part of it, so she doesn't need to see the balance (and neither do I). She scans the cheque, types in the amount you made it out for and receives a "Yes" or a "No". That's all that's required, nothing more. The reason for any "no" is not her concern (although, I know she'll look at me just so and be ever so polite and say "I'm terribly sorry Sir" - and mean it *sigh*), that's my problem which is why I'd be coming to see you to box your ears...:)<BR/><BR/>The simple fact that any transaction that takes place between you and I only takes place between you and I, not the bank, clearing house or any other financial facilitator is what has been lost in all this complexity.<BR/><BR/>Still, I can see your points. I just see the system as capable (becauseI know it is) but the rules mean that acheiving its fullest potential and capacity is completely unattainable.Plonkahttps://www.blogger.com/profile/01552546816593027504noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-69619849052073774692007-06-22T09:04:00.000+10:002007-06-22T09:04:00.000+10:00Dikkii: Upon re-reading my comment, and taking a c...Dikkii: <I>Upon re-reading my comment, and taking a closer look at the Cheques Act...</I><BR/><BR/>Like I said, Legislation and Rules. Just because some boffin in Canberra says we're <I>not allowed</I> to do it doesn't mean that the system <B>can't</B> do it. It can. It can do it quickly and securely.<BR/><BR/><I>If the terminal is telling the shop assistant...</I><BR/><BR/>It should only be on the your display. The shop assistant is not supposed to be looking at the display, the same as he/she is supposed to give your card back as soon as it's swiped, which admitedly, most don't. I tend to lean over and grab it before I enter my pin while regailing them with the filthiest look I can manage...:)<BR/><BR/>But that said, "insufficient funds" is <B>not</B> considered a breach of privacy. There is absolutely <B>no</B> information about you in that statement, other than you may have used the wrong account. That's what your ATM spits out at you when you don't have enough in there and it's printed on thousands of disgarded bits of paper daily. I think POS systems just say something like "Transaction denied". It still amounts to the same thing. In fact, I think it's more insipid that way because both teh shop assistant and anyone in line with you will immediately assume you don't have enough money when it may well be that you've just miscalculated your daily withdrawal limit...Plonkahttps://www.blogger.com/profile/01552546816593027504noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-32714599491700565382007-06-21T23:58:00.000+10:002007-06-21T23:58:00.000+10:00Upon re-reading my comment, and taking a closer lo...Upon re-reading my comment, and taking a closer look at the <A HREF="http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/77B0379B77D0768CCA256F71004ED5A4?OpenDocument" REL="nofollow">Cheques Act</A>, there's something else I should mention - and that is this:<BR/><BR/>Unless a cheque is made out to cash <B>and</B> is uncrossed, it simply can't be negotiated for cash.<BR/><BR/>This makes such an instantaneous transfer such as what we've been alluding to in the above comments impossible. Full stop.<BR/><BR/>Incidentally, it's irrelevant whether your teller in your example above (and she sounds like a stunner) looks at the balance in the drawers bank account if a cheque is crossed. The cheque is unable to be cashed and must follow the clearance process.<BR/><BR/>Such an enquiry would not be helpful anyway if the drawer had deposited funds to their account and they were awaiting processing.Dikkiihttps://www.blogger.com/profile/07897381809885423712noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-16228636566344549132007-06-21T18:42:00.000+10:002007-06-21T18:42:00.000+10:00My dictionary disputes that. Transactions don't ha...<I>My dictionary disputes that. Transactions don't have "owners", they have two or more mutually agreeing parties and this is where I think the whole process begins to fall apart.</I><BR/><BR/>Your dictionary would dispute this. My wording isn't good.<BR/><BR/>Nevertheless, the initiator of a deposit is the depositor and not the drawer.<BR/><BR/>This is the reason why the credit must be processed, and by implication, the debit as well.<BR/><BR/><I>Now, have you ever tried to make an EFT purchase or withdrawal and been told "insufficient funds", or "approved"? Of course you have. </I><BR/><BR/>Withdrawal? Yes. But I'm initiating the transaction at a point where there is no (theoretically) privacy issues.<BR/><BR/>EFT purchase? If the terminal is telling the shop assistant that there is "insufficient funds" this is a breach of privacy, pure and simple.<BR/><BR/>The message they should be seeing to keep this legal is something along the lines of "payment unsuccessful" or "refer to bank" or both.<BR/><BR/>I'd love to see a situation whereby funds are transferred at a bank branch, but it can't work and here's why:<BR/><BR/>Most cheque deposits are by businesses depositing double figures or more of cheques in one go. Banks bulk process these (off-site), but the credit (insofar as there are debits to match it) simply must proceed in this instance. Unless someone who had completed the deposit slip could travel with the deposit to the off-site processing centre and initial amendments to the deposit slip.<BR/><BR/>Deposit reconciliations within businesses are often done the next day off new statements or internet facilities.<BR/><BR/>Where numbers don't match the deposit butts, or duplicate record in a deposit book, it would be costly to business to chase this up with the bank in question.<BR/><BR/>I agree EFT would be good for this - if we're talking about one or two cheques with a deposit. It's not cost-effective to use for the small amount of personal bank customers who deposit cheques. It would be also slow - bank branches are scored on how many transactions they can process per hour. If you cannot process a transaction for whatever reason, this eats into your score result.<BR/><BR/>1975? Well I woulda been 3 then. No wonder I can't remember it! Sounds like the good old days.Dikkiihttps://www.blogger.com/profile/07897381809885423712noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-30328910895158435502007-06-21T14:34:00.000+10:002007-06-21T14:34:00.000+10:00Dikkii: The "owner" of the transaction in this cas...Dikkii: <I>The "owner" of the transaction in this case is the depositor.</I><BR/><BR/>My dictionary disputes that. Transactions don't have "owners", they have two or more mutually agreeing parties and this is where I think the whole process begins to fall apart. The problems even have names, Legislation and Rules.<BR/><BR/><I>This is different to an interbank transaction involving an ATM - the drawer in this case is the one initiating the transaction and is therefore the "owner".</I><BR/><BR/>Once again, it's an agreement between you and the bank. They agree to make your funds available via that service. You agree to whatever conditions you have to to be able to use that service, there is no "owner", just an agreement and a mechanism.<BR/><BR/><I>...... You just happen to be doing it from another bank's ATM.</I><BR/><BR/>While underneath it is a simple EFT transfer. The EFT system is the mechanism that interbank uses to move money around. It all ties back to a central point. It had to. There was no other way we could be 100% sure (back in the day) that we had trapped every single transaction taking place out there at any given time in the electronic medium.<BR/><BR/>Now, have you ever tried to make an EFT purchase or withdrawal and been told "insufficient funds", or "approved"? Of course you have. Those phrases do <B>not</B> constitute "confidential information". Quite the contrary, they are necessary to the whole thing working. The EFT system <B>never</B> asks for nor receives an account balance. It queries the account on volumes only. If the account holds a greater volume than the transaction requires (and there are many variables to be considered there) then the POS system receives an ACK (acknowledgement), if not, it receives a NACK (non-acknowledgement).<BR/><BR/>So let's say I present your cheque to my bank, directly to the lovely teller (she's gorgeous, seriously). It should be a simple matter for her to scan the barcode on the cheque. Once the system has your account details, the EFT system can do it's funky thing and return either an ACK or a NACK. At that point, my lovely teller can either say "the funds have been deposited (choice of words here, "The funds transfer is complete" would be just as valid) or "Oh dear, there seems to be a problem", at which point I can come and box your ears for you...:)<BR/><BR/>The EFT system (I know, I can't help it) provides for simplicity and security. These were the main specs we were given when we did POSI, they are all still inherent in EFTPOS and even after all this time are as yet to be used to it's fullest potential... *sigh*...<BR/><BR/>I remember the 7 day thing but I seem to recall that the change didn't make any difference. 5 "working" days seems to equal 7 days for banks, despite the fact that their computer rooms work 24x365.<BR/><BR/>As to the change from 3 days, I was only young at the time but I seem to remember that cheque fraud was rampant at the time.<BR/><BR/>The PMG met it's most timely demise in that most tumultuous of years, 1975. "May well we say 'God save the Queen' because nothing will save the Governor General!" - Gough Whitlam....Plonkahttps://www.blogger.com/profile/01552546816593027504noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-24023268500104027262007-06-21T00:17:00.000+10:002007-06-21T00:17:00.000+10:00G'day Plonka, Still, I can see room for improvemen...G'day Plonka,<BR/> <BR/><I>Still, I can see room for improvement given that I can take money out of a NAB account via a CBA owned ATM (I use these guys as examples only). It just doesn't need to be that complex. A simple query across a very proven and capable network can provide the answer as to "sufficient funds" instantly. The resulting transaction can take place almost instantly as well.</I><BR/><BR/>I agree, but this throws up an interesting conundrum.<BR/><BR/>The "owner" of the transaction in this case is the depositor. Because of this, the credit simply <I>must</I> be processed on day one, and therefore, so too does the debit.<BR/><BR/>Leaving that aside, a system where the credit doesn't get processed until the debit is verified first is fraught with some danger - the payee's bank would require access to confidential information regarding the drawer's account.<BR/><BR/>This is different to an interbank transaction involving an ATM - the drawer in this case is the one initiating the transaction and is therefore the "owner". It's similar to initiating an interbank transfer via internet banking - the drawer is initiating the transaction, not a payee.<BR/><BR/>When you go to do a withdrawal using another bank's ATM, you are, in effect, telling your bank to send the money to another bank so that you can draw on it. You just happen to be doing it from another bank's ATM.<BR/><BR/><I>There's just to many rules these days. When I was a kid my mum used to complain that a cheque took 3 days to clear (that's right, not 5). Why? Because that was the PMG (Post Master General - the Aussie Post of the day) guarantee for mail delivery.</I><BR/><BR/>Crumbs. When I started work at the bank (ten years ago in a fortnight's time), clearance was 5 working days, and a few of the old timers used to tell me about the good old days when clearance was 7 working days.<BR/><BR/>I wonder how long ago it went from 3 to 7? I don't even know when the PMG became Telecom Australia, OTC and Australia Post. Bet it was ages ago.<BR/><BR/>And haven't Australia Post's standards slipped? Now to send to anywhere in Australia within 3 working days, you need to go Express Post.<BR/><BR/><I>Apologies for not getting to you sooner, but there's that work gig to be considered. I'm not doing shift work at the moment and the daily grind seems to take a lot more time than I remember...:(</I><BR/><BR/>That's OK. Working days is like that. Hope you're getting out as well, though.Dikkiihttps://www.blogger.com/profile/07897381809885423712noreply@blogger.comtag:blogger.com,1999:blog-7115935.post-80900693678497723912007-06-20T22:26:00.000+10:002007-06-20T22:26:00.000+10:00Complicated indeed. Thanks for that Dikkii. I alwa...Complicated indeed. Thanks for that Dikkii. I always thought it was a simple case of the cheque just making it's way from one bank to another.<BR/><BR/>Still, I can see room for improvement given that I can take money out of a NAB account via a CBA owned ATM (I use these guys as examples only). It just doesn't need to be that complex. A simple query across a very proven and capable network can provide the answer as to "sufficient funds" instantly. The resulting transaction can take place almost instantly as well.<BR/><BR/>There's just to many rules these days. When I was a kid my mum used to complain that a cheque took 3 days to clear (that's right, not 5). Why? Because that was the PMG (Post Master General - the Aussie Post of the day) guarantee for mail delivery.<BR/><BR/>Apologies for not getting to you sooner, but there's that work gig to be considered. I'm not doing shift work at the moment and the daily grind seems to take a lot more time than I remember...:(Plonkahttps://www.blogger.com/profile/01552546816593027504noreply@blogger.com