Personal Finance

What is a "collection item" service at CIBC?

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  • Feb 6th, 2017 6:40 pm
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Apr 16, 2007
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Refers to cheque clearing processes. (interbranch)
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Mar 3, 2005
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The phrase is a little strange, it hails from the bills of exchange act. It refers to a bank making arrangements to collect from another bank/branch for a cheque payable to you/your company as payee by a customer of the other bank/branch as payor.
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Nov 22, 2015
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umop wrote: I was looking through their list of products and saw that about half way down the page.

https://www.cibc.com/en/small-business/ ... -fees.html
I just went through this with CIBC for a personal account.

I received an Australian Money Order in AUD. Because it wasn't a Canadian Money Order (in AUD), none of the banks in Canada were willing to process my deposit.

I ended up paying fees for CIBC to send it to the issuing Australian bank as a collection item. It's a terrible process where there is no way to track the status, or know when the money will be actually deposited. They literally have to mail the thing to the other bank, and wait for them to respond. In my case, my collection item sat in "limbo" for ~6 weeks and was deposited to my account without notification. In the end, I think CIBC charged me around $20, and then the Australian bank ended up charging another $20 or $25 to send the money as a wire/EFT. Finally, I think I was charged another $10 by CIBC to receive the transfer.
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superfresh89 wrote: I just went through this with CIBC for a personal account.

I received an Australian Money Order in AUD. Because it wasn't a Canadian Money Order (in AUD), none of the banks in Canada were willing to process my deposit.

I ended up paying fees for CIBC to send it to the issuing Australian bank as a collection item. It's a terrible process where there is no way to track the status, or know when the money will be actually deposited. They literally have to mail the thing to the other bank, and wait for them to respond. In my case, my collection item sat in "limbo" for ~6 weeks and was deposited to my account without notification. In the end, I think CIBC charged me around $20, and then the Australian bank ended up charging another $20 or $25 to send the money as a wire/EFT. Finally, I think I was charged another $10 by CIBC to receive the transfer.
Yeah... its a crappy process. The banking and clearing systems vary between different countries. Its not an internationAl standard. Thats why they have this really old skool learing process.

Next time... ask them to send you a western union transfer or money gram. Works well if its a small amount. Or ask them if their bank offers a global money transfer. (Cheaper than wire).
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UrbanPoet wrote: Yeah... its a crappy process. The banking and clearing systems vary between different countries. Its not an internationAl standard. Thats why they have this really old skool learing process.

Next time... ask them to send you a western union transfer or money gram. Works well if its a small amount. Or ask them if their bank offers a global money transfer. (Cheaper than wire).
Yeah... for sure. We figured that out the hard way lol. The issue with my cheque was that it was a wedding gift from a relative who doesn't speak English - I'm sure they had a hard enough time getting the money order and sending it here - didn't feel right to ask them to try to figure out Western Union or to re-send it another way.
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UrbanPoet wrote: Yeah... its a crappy process. The banking and clearing systems vary between different countries. Its not an internationAl standard. Thats why they have this really old skool learing process.

Next time... ask them to send you a western union transfer or money gram. Works well if its a small amount. Or ask them if their bank offers a global money transfer. (Cheaper than wire).
The collection process can also be necessary within Canada too.

This can happen if you try to deposit a cheque that isn't written on a pre-printed cheque with the proper MICR encoding for the bank & account information as part of the form. You can write a cheque on a napkin provided that it has the necessary elements (date, amount, payer, details of bank drawn on, payor's account info, and payor's signature) and it's a valid payment document and is still considered a cheque.

However, because it obviously cannot be processed automatically through the normal payments system like pre-printed cheques, the bank receiving the deposit would send it out on collection.

In 10 years in retail branch banking, I only saw something like this maybe 2 or 3 times. Something I saw a little more often was people trying to save on personal cheque orders and they'd try to photocopy a cheque and use the photocopy instead. However, the bank will charge you a fee of about $5 for every non-MICR encoded cheque that you write. Based on how much pre-printed cheques cost these days it might be a cheaper option if you only write a few cheques a year!
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CanadianLurker wrote: The collection process can also be necessary within Canada too.

This can happen if you try to deposit a cheque that isn't written on a pre-printed cheque with the proper MICR encoding for the bank & account information as part of the form. You can write a cheque on a napkin provided that it has the necessary elements (date, amount, payer, details of bank drawn on, payor's account info, and payor's signature) and it's a valid payment document and is still considered a cheque.

However, because it obviously cannot be processed automatically through the normal payments system like pre-printed cheques, the bank receiving the deposit would send it out on collection.

In 10 years in retail branch banking, I only saw something like this maybe 2 or 3 times. Something I saw a little more often was people trying to save on personal cheque orders and they'd try to photocopy a cheque and use the photocopy instead. However, the bank will charge you a fee of about $5 for every non-MICR encoded cheque that you write. Based on how much pre-printed cheques cost these days it might be a cheaper option if you only write a few cheques a year!
Lol yes... i feel you... i got 7 years of retail banking under my belt lol.
Its such an obscure transaction. The worst was when a credit union in the usa paid a client with an unencoded check in cad, drawn against a usd credit union... sent to collections. Took 4 weeks to process and both sides charged $25... ouch

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