Personal Finance

What Happens When You Deposit A Post-Dated Cheque Early?

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Aug 18, 2005
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What Happens When You Deposit A Post-Dated Cheque Early?

A CSR for PCFinancial told me that post-dating is just an agreement between you and the person who wrote the cheque, and if you deposit it early then it may actually be honoured.

This does not make sense to me because cheques stale-date (i.e. become void) 6 months after their face-date, therefore they DO check the date.

What's the real story? Can you deposit cheques post-dated before their face-date? Will it be rejected?
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Sep 30, 2003
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I've had an instance where the bank did cash it (TD). I've also had instances where the bank held the cheque until the date it was valid.

If it's critical that the person doesn't want it cashed before a certain date, don't deposit it - banks make mistakes.
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Oct 10, 2006
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Halifax
What the CSR told you is correct.

I've seen it tons of times where a post dated cheque clears early. It is an agreement but banks do want to catch it and not process it.

If a post dated cheque does clear early, they can reverse it back as it was their mistake.

~C
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Jul 1, 2007
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The stale date is the main purpose of the dating of the cheque. That is for the benefit of the payer, so that they don't have to monitor their account for more than 6 months for a bloody cheque to come out (should the payee be slow in depositing it).

Cheques deposited individually at a teller are usually caught and the post date is made obvious to the depositor at which point they have the option of holding on to the cheque until it is due to be deposited or the bank can diarize it to be deposited on the date. If the cheque is deposited by a business, however, it might be in a batch of cheques and the date would be missed. If it is deposited in a machine the date isn't looked at at all, except for staledate.

The bank isn't liable if the cheque does clear before the date. As a previous poster mentioned, this is an agreement between payer and payee and not instructions to the bank to withhold funds until a certain date. The payee is responsible. Also, it is technically fraudulent to write a cheque out of your account for funds that are not in the account (yet), so the practice of writing out a cheque post-dated for payday is actually illegal. Thank the bank when they only charge you a $30-$40 NSF fee.
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Sep 9, 2005
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From the Canadian Payments Association (of which every major bank is a member) website:

What happens if a post-dated cheque is accepted and processed to my account before the due date?

Under CPA Rules, a post-dated cheque is not eligible for clearing and therefore should not be deposited before the due date. However, given the large volume of cheques and the degree of automated processing, some post-dated items may inadvertently slip through.

Under Rule A4, Section 6(b), a payment item may be returned through the clearing by a CPA member financial institution for the reason "post-dated" up to and including the day prior to the due date. Once the due date is reached, the payment item cannot be returned for the reason "post-dated".

A customer with concerns about a post-dated cheque being processed to his or her account should raise them with his or her financial institution. If the institution is notified within the timeframe described above, the cheque can be returned through the clearing. Questions about overdrafts as a result of the early processing of post-dated items should also be addressed to the financial institution.
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Mar 31, 2003
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Salinger wrote:
Aug 1st, 2007 10:57 pm
From the Canadian Payments Association (of which every major bank is a member) website:

What happens if a post-dated cheque is accepted and processed to my account before the due date?

Under CPA Rules, a post-dated cheque is not eligible for clearing and therefore should not be deposited before the due date. However, given the large volume of cheques and the degree of automated processing, some post-dated items may inadvertently slip through.

Under Rule A4, Section 6(b), a payment item may be returned through the clearing by a CPA member financial institution for the reason "post-dated" up to and including the day prior to the due date. Once the due date is reached, the payment item cannot be returned for the reason "post-dated".

A customer with concerns about a post-dated cheque being processed to his or her account should raise them with his or her financial institution. If the institution is notified within the timeframe described above, the cheque can be returned through the clearing. Questions about overdrafts as a result of the early processing of post-dated items should also be addressed to the financial institution.
Hmm is this deliberately vague as to the impact on the account-owner?

The layman's language translation is:

The person depositing shoud not deposit before the date.

The banks "should" catch it, but if they don't then call them. What happens after you call them is not stated or even hinted at.
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Jul 1, 2007
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So what it's saying is that if the payer complains to the bank before the actual date on the cheque they can still reverse it. I would assume this is done via pro forma declaration, which would be a permanent reversal though, not a wait till the date reversal.
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Apr 11, 2007
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Thalo wrote:
Aug 1st, 2007 10:40 pm

The bank isn't liable if the cheque does clear before the date. As a previous poster mentioned, this is an agreement between payer and payee and not instructions to the bank to withhold funds until a certain date. The payee is responsible. Also, it is technically fraudulent to write a cheque out of your account for funds that are not in the account (yet), so the practice of writing out a cheque post-dated for payday is actually illegal. Thank the bank when they only charge you a $30-$40 NSF fee.

1) This doesn't make sense. Technically the bank IS liable for clearing the
cheque before the date. There are chances for the payee to makie a
mistake and deposit the cheque (like batch deposit), but it is the bank's
job to catch such a transaction. This is what a bank does.

2) It is NOT fraudulent to write a post dated cheque. If it was, then why
is the DATE section on the date.

Post dated cheques are used worldwide, I have only seen banks in
Canada clearing post dated cheques and even some CSR saying that it is
illegal to issue Post Dated cheques.

3) No way can we thank the bank for the NSF charged when they make
their mistake of honoring the post dated cheque. I have demanded the
bank to show me where it is shown that in canada it is illegal to issue
post dated cheque, they could not give any proof...

Thalo, can you provide and evidence that issuing Post Dated cheque is
illegal in Canada?
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Jul 1, 2007
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Not that post-dating is specifically illegal, but fraud is illegal and writing a cheque for funds that you do not have (whether post-dated or not) is fraud.

1) No, the bank is not liable. We've been over this already. The CPA rules that someone else posted here only specifies that banks "should" catch post-dated cheques.

2) Been over this already too. I'll repeat, it's to determine the date on which the cheque was written so that a stale-date can be established.

3) Not the bank's mistake, it's the depositor's mistake. Blame the depositor.

As far as post-dating cheques worldwide, I don't know much about banking outside of North America and Europe but in Europe cheques are hardly used at all. Most banks have written in their financial service terms specifically "you shall not write a post-dated cheque". I have personally had a bank account in Austria and my parents have bank accounts in the UK and Germany and I have read through the FSTs for each of them and they all have it in some form. I have also just dug up my old Financial Service Terms for an account I had with FleetBank of Boston a few years ago but couldn't find anything in regards to post-dating cheques in it. I suppose the practice is more common in North America and not illegal or banned, but just frowned upon. Again, post-dating is not illegal, but writing cheques for money that isn't in your account is.
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Nov 23, 2001
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Everyone writes a post dated cheque around here to pay property tax. Its probably the only time of the year people majorially uses cheques.

Thing is - most cities do not accept credit cards, and noone is going to carry a few thousand dollars in cash to city hall. Also, noone usually writes it for the day that they pay because its usually such a large sum of money that waiting for the very last day to pay usually gets you a at least a few dollars in interest (or if you are in debt quite a few dollars not paid in interest)
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Nov 23, 2001
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As far as I know the bank is not liable for the amount of the cheque for the period of time that that it was not supposed to be cleared for.

However, they also cannot charge you a NSF (Non sufficient funds) penalty on their mistake.
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Member
Sep 20, 2006
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My stupid landlord once cashed a post-dated cheque of mine. The bank was stupid enough to clear it. The landlord came after me for another cheque cuz he said he couldn't find the one that's missing. It came out later that he had inadvertently put in two of my cheques (one of right date and the other 4 months post-dated) in the envelope when depositing and the bank cleared the post-dated one. Nothing was ever done about the correct dated one. I closed the account and started everything anew.
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Sep 9, 2005
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Toronto
While I know that writing a cheque without the funds to cover it is technically fraud (though I've never heard of anyone being prosecuted save for instances where criminal intent is clearly evident) the same does not apply to post-dated cheques.

Contrary to what some have stated, the date on a post-dated cheque is not merely an agreement between the cheque writer and payee, it signifies the date the cheque becomes a negotiable instrument. Therefore, only if you don't have funds to cover a cheque on the date it becomes negotiable, could it be construed as "fraud".

The CPA states clearly in rule A1 that a bank or trust company "CANNOT" cash a cheque before the date indicated on it. Of course it happens, but if it does, you have the right to request a reversal and also a reversal of any NSF fees resulting from it. If your branch does not comply, you can launch a claim through your bank's federally legislated dispute resolution mechanism.

As the CPA is merely an umbrella organisation comprised of the banks and trust companies, it cannot order a bank to return funds in such a case, however, that does not recuse the bank's responsibility to do so. If they were foolish enough to fight it all the way to the 3rd party review mechanism, they would almost certainly lose.
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Jul 1, 2007
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So a bank negotiates a non-negotiable instrument. Who is really at fault? The bank that accepts it or the guy who is trying to get it negotiated? I think the person depositing it is at fault, they initiated the transaction of a non-negotiable instrument. If someone knowingly deposited a fake $100 bill is the bank at fault or the depositor?
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Mar 31, 2003
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Thalo wrote:
Aug 2nd, 2007 11:38 pm
So a bank negotiates a non-negotiable instrument. Who is really at fault? The bank that accepts it or the guy who is trying to get it negotiated? I think the person depositing it is at fault, they initiated the transaction of a non-negotiable instrument. If someone knowingly deposited a fake $100 bill is the bank at fault or the depositor?
You could argue this for many things. For example a fraudulent endorsement signature.

What about an illegible amount....I mean bad writing so that the amount of the cheque is questionable?

We are not talking about something that is merely questionable or uncertain. The fact is that we know what day it is, and we know whether or not a date is in the future, and so does the bank. If I deposit a cheque that says $800 but using an ATM I claim it is $1000 will the bank let that through and then stick the originator of the cheque with the problem? No? Why not, it is the same as saying today is September 5, 2007 or later...when the date is clearly written on the cheque and available to the bank to read.

I do agree that the primary responsibility is with the depositor. I do not agree that the bank can merely ignore the date.
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