Warnings when writing Cheques

The law about "crossing" cheques changed in 1996. To protect your cheques from being cashed by someone other than the person the check is made out to read on...

’Not transferable’ and ’account payee only’
Crossing a check with ’not transferable’, ’account payee’ or ’a/c payee’ means that the check can’ be used by someone else. A check marked as ’account payee’ can only be paid into the bank account in the same name of the person it is made out to. Some people write ’only’ after a/c payee. This makes it clearer to the person receiving the check but it is not necessary to add 'only'.

This will help reduce check fraud, as anyone using the check can only put it into the account named on the check. But because only the person named on the check can bank it, it is very important that the name is correct.

Not negotiable cheques
This is not the same as ’non-transferable’. A check marked ’not or non- negotiable’ can be transferred to someone other than the person it is made out to. But it still has to be paid into a bank account.

Do not accept a ’not transferable’ or ’account payee’ check if it has been transferred to you. Only accept it if it has been made out to you in the first place. Make sure your name is written correctly, as it must be the same name as your bank account.

For example, imagine you sold your car over the weekend. The buyer didn’t have enough cash but offered you their pay check. If it’s ’non transferable’ your bank could decline it. Then you’d have to track down the buyer and get them to pay you again.

Cash cheques
Writing a check out to ’cash’ means that anyone can cash it for the sum it is written out for. It does not have to be paid into a bank account. This can be done for someone who may not have a bank account so don’t also cross the check with ’non transferable’ or ’a/c payee’.

But also be aware that if a cash check is lost, anyone can bank it.

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