Personal Finance

which bank cheques are crossed cheques ?

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  • Jan 24th, 2023 5:16 pm
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Deal Addict
User avatar
Mar 3, 2005
1081 posts
826 upvotes
Mississauga
Kiraly wrote: Dude, looking at your current avatar, I'm sorry to see that your hair is receding and you now need glasses. It happens to the best of us...
Indeed, that's what's happened!..... I had a new sticker made for the car.

:-)
Sr. Member
Jul 8, 2009
736 posts
316 upvotes
Toronto
So I'm going to necro this thread because I'd like to report what I did.

BTW: The answer to the OP is definitely that pre-printed crossed cheques are not available in Canada. If you want a crossed cheque, you must do so yourself.

I finally decided to try it out. The cheque was to myself (I was moving money across accounts) and I made two parallel diagonal lines with the word BANK between them. I placed this above the Payee name, a bit to the right of the pre-printed payor information. The idea is to not interfere with any of the CPA-mandated information fields and so to not interfere with machine processing of the cheque.

crossed.png

The cheque cleared!

Note that the proper Canadian way to cross a cheque is to have the two lines, and, optionally, write "Bank" or "Non-negotiable" or "Bank, Non-negotiable" between the lines. You may also write the name of a specific bank, instead of just "bank", which means that you only allow deposit at that specific bank. "A/C Payee Only" is not part of a Canadian cheque crossing.

ETA:

I'm not a lawyer, but I went down quite the rabbit-hole and did a bunch of reading about this (including the link that Kiraly provided, and many other legal commentaries as well as the laws in Australia and the UK). The words "not negotiable" do not make the cheque invalid, and they do not prevent it from being transferred. What many people don't know is that a cheque is by default "negotiable" which means that someone who, in good faith, accepts a cheque as valid is treated as having the full rights to collect on it, and cannot be held responsible or sued for the money they obtain, even if the cheque was stolen or obtained by fraud. In fact they can sue the original issuer if the cheque is rejected (e.g. if the issuer notices it has been stolen and puts a stop payment on it). This does not apply to the thief/fraudster himself, who is of course guilty and liable, but to someone who has been duped by the thief/fraudster down the line. (This explains why Money Mart wins its cases!) Adding "not negotiable" removes this quality from the cheque, so the onus is on anyone who receives such a cheque to make sure everyone whose hands it passed through is trustworthy and legitimate. It is a warning: "Hey, make sure there's no funny business, or you might be on the hook!"

As for "A/C Payee", this is not explicitly part of the Canadian law, but the law provides that "When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but it is not negotiable." It would seem that "A/C Payee" does exactly that, so a cheque marked "A/C Payee" is automatically also "Not Negotiable". "A/C Payee" is mentioned in the UK law (added in 1953) and renders the cheque non-transferable, and thus also non-negotiable. However, I have seen samples of cheques that have both "A/C Payee" and "Non-negotiable". IMO the latter wording is redundant, but it may just be a customary habit, and probably doesn't hurt. ETA2: After reading some more, it seems that "A/C Payee" does not make a cheque non-negotiable in U.K. and Indian cases, even though logically it should. One Indian judge says this weird state of a cheque being payable only to a specific payee, yet somehow still being negotiable, "smacks of unreality and gives a rude shock to our practical common sense", but nevertheless he could not overrule the previous precedents. The status in Canada is unknown to me, but it seems including both statements is the safest course.

Each of the three wordings is targeted to a different party:
  • "Bank" ("&Co." in the UK) or just the crossing itself is for the drawee (issuing) bank, to not release the funds directly over the counter, but to send them to another chartered bank.
  • "Not Negotiable" is for any recipient of the cheque, to be diligent that they are receiving a good cheque from a trusted party (and that they have done likewise, all the way up the line to the issuer) and informs them they may be liable if the cheque was obtained illegitimately.
  • "A/C Payee" is for the payee's (collecting) bank, to not process a cheque for someone who is not the named payee, or they may be considered negligent. (And by extension any recipient who isn't the named payee is asking for trouble if they accept it.)

Finally, the 2006 CPA standards for Canadian cheques permit the addition of both "security" and "informational" printing on the front (or back) of a cheque so long as it does not "interfere with any areas of interest". It seems that automated image-processing of cheques will tolerate additional information, like crossing, as long as it does not obscure the other elements of a cheque. Unlike UK and AU cheques (which typically cross the cheque over the name and amount fields) or NZ and Indian cheques (which typically cross in the upper left corner), a Canadian cheque should probably be crossed in the most obvious clear area, which is above the "pay to" field, as I did, and as hopetindall beautifully does with his stamp.

If I ever have the chance again (cheques are used so rarely these days) I'll try out the full trifecta: A cheque crossed, and marked "Bank", "Not Negotiable", and "A/C Payee Only".

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