Confused about post dated cheques

[chaudi]

I've got a pc financial account and wrote a check for the end of the month that was a Sunday. I called on the Friday afternoon and ask for a stop payment and to my horror they said it had already cashed! I was then informed that as soon i write the cheque it could be cashed and that they don't pay any attention to the date on it, the cheque is not checked! I later talked to someone else who said that if there's enough time they can try to get the money back for the other's bank. So i'm little dismayed now about written post dated cheques. Can someone clear this up? I'm think i need a separate account now just to write posted dated cheques that way i can just keep in empty until it's time to pay.

[Addy]

My bank has told me for years that post dated cheques mean nothing and in fact (legally) you can't write a post dated cheque.... what I believe they mean is you CAN in fact write one, but the date is meaningless.

Perhaps someone who works in a bank or is knowledgeable about financial law can confirm (or deny) this. I've always thought it a bit odd.

[HaroldCrump]

Happened to me a couple of years ago.
I was told the same i.e. post dated cheque means nothing, the receipient can deposit it straightaway and the bank will clear it.
However, if you do a stop payment, the bank will honor that by refunding your money back.
That is what I did - I asked for stop payment and they refunded the money back.

I'm think i need a separate account now just to write posted dated cheques that way i can just keep in empty until it's time to pay

Don't do that. You will get a NSF charge if the cheque is deposited.

[MoneyGal]

Wellllll....the Canadian Payments Association technically has agreed that it will not process post-dated cheques before the date on the cheque. Here's a link.

However, in practice, in my experience banks and credit unions make no promises about honouring the date indicated on a particular cheque. For these reasons, it is generally unwise to use post-dated cheques, although they can seem convenient.

[Addy]

I imagine the no promises thing stems from human inaccuracy.... not trying to pounce on anyone, just saying it's human to err.

[MoneyGal]

It isn't so much human inaccuracy as that a lot of payments are essentially processed mechanically (i.e., machine-read). Tellers do not stop to verify the date on every single cheque, and you wouldn't want to live in a banking world in which they did.

[the-royal-mail]

Interesting thread. I've been paying for my rent 4 months at a time with post-dated cheques, for years. They receive all the cheques at once but only attempt to cash them on the 1st of the month, which is fair. Cashing them all at one and having nearly $4K of my money is not fair, or legal.

But maybe that doesn't apply to people besides landlords.

I did think the date was more important than suggested in this thread, however. I always understood that the grace period for expired cheques was about a year. If you get a cheque dated 6-11-10 then you can cash it for about a year. As well, the banks do practice a certain amount of discretion in any new calendar year, for people who accidentally write 2009 instead of 2010 etc.

I once paid a phone bill in December but because my mind was already in the new year, I accidentally wrote 12-11-07 on the cheque when it should have been '06. This was my last payment before moving out of province. I didn't notice at the time that it was not cashed (busy with the move and all), then a year later when it was cashed I was like W DA F...and upon further investigation learned that my own mistake caused the phone company not to get paid for a full year. Really weird. They never even called and questioned it, or charged me any interest or anything. But when it was finally cashed, they processed that as a credit on my account and then kept sending me statements saying that I had that amount on file as a credit. Seems they could not do basic addition or logic.

Thus endeth the lesson for today.

[OhGreatGuru]

The date on the cheque certainly ought to be meaningful. It is not supposed to be cashable until on or after that date. If banks are doing it is because they find it inconvenient - not because they should be allowing it. In your case, someone may have deposited it electronically, so a teller doesn't see it. And I don't know what having it dated for a Sunday does, if that was the due date. I would challenge the bank, tell them they should not have accepted it for deposit, and to reverse the charge to the depositor.

Regarding stale-dated cheques. For a long time it was 1 year, but in recent years I have been told it is now 6 months.

[Dana]

Drawing on my experience as a bank teller (circa 1995) we made an 'earnest effort' not to cash cheques before the date on the cheque, however, the official line was 'the cheque is cashable on the date you sign the cheque, not the date on the cheque'. There was a clause to this effect in our account opening agreements. When you give someone a post-dated cheque, you are relying on their word that they will not try to cash it before the agreed upon date.

This was not usually an issue in the branch because the teller would physically handle each cheque and verify the date. The issue arose with electronic banking where cheques are cleared in batches and not necessarily verified individually.

[Berubeland]

As far as I know all checks are processed by machine. If you deposit a check in a bank machine no one will look at that check.

That's what the little lines at the bottom of the check are for. It's like a bar code.

It's extremely dangerous to have unsecured checkbooks laying around. If they are stolen they can be cashed.

As a little tip, if someone give you a third party check. This can legitimately happen if you are a landlord and someone gives you a GST check or a OW check. If you go to the teller they will tell you that they don't accept them. If you deposit them in a bank account via the bank machine no problem.

My bank TD is awesome in that they will keep your postdated checks and deposit them on the correct date for you. This can be very handy if you would rather avoid the bank on the 1st of the month. I don't enjoy the lineups on that day or the 20th when the child tax credit comes in.