Post-dated cheques

[WinterHawk]

If you deposit the cheque in an ATM, they really don't check anything but the MICR line and whether or not the cheque is signed. The number of cheques processed a night is hughe!!! Since the staff are paid/rated by the number of items processed, their just concerned about throughput and not whether or not your chequse should have been returned because someone tried to cash it too soon.

Besides they're off-shoring most of the work electronically to India for verification.

 

[thompo69]

I appreciate what you're saying, BUT posturing and negotiation is a fact of life, and it's done all the time in business.

I'm just saying that I'd make a case or argument with the Landlord on that because of the grief and inconvenience of it all.

It's like putting the Landlord on notice that if he doesn't smarten up, you'll take action.

If the tenant suffers from a lower credit rating due to the landlord's negligence, the tenant has a cause of action in small claims or whatever against the landlord, not to mention the bank charges.

Sometimes you have to force the other side to cough up if the consequences of not doing so are greater.

*Edit* P.S. What may not be in a lease agreement, may be ruled to one party's favour in equity (equitable relief) by a judge if the circumstances warrant it - particularly with residential leases. This is not a commercial lease where it's more laissez-faire by judges.

Yes, the tenant could have a cause of action against the landlord. And if the tenant files such an action and is successful, then he can pursue payment. Why? Because he has a court order. A tenant does not have the right to decide himself that he has been wronged and unilaterally withhold rent. If he has a problem, he should file an application either with the Landlord Tenant Board or in court (small claims or otherwise) as is appropriate.

I understand that posturing and negotiation are a part of life, and yes, you may be successful by threatening to withhold rent, or even actually doing it, especially if the landlord is weak or naive about the law. However, if you play that game with a landlord who knows what the law is, you're going to get burned. This isn't just me taking an overly strict interpretation of the law, the Landlord Tenant Board website itself says: "A tenant can be evicted if they withhold rent without getting approval from the Board." If that's the advice given by the Board itself, I wouldn't hold my breath for any of its members to rule differently.

 

[The Bandit]

How can they cash a personal cheque before the date, yet you can't deposit an employer cheque before it's date? IMHO the cheque should be invalid until the date on the cheque, therefore your landlord shouldn't be able to do anything with it.

 

[WinterHawk]

How can they cash a personal cheque before the date, yet you can't deposit an employer cheque before it's date? IMHO the cheque should be invalid until the date on the cheque, therefore your landlord shouldn't be able to do anything with it.

A Teller would normally examine a cheque and note that the date on the cheque is future dated and should hand the cheque back stating that it's post dated. This doesn't happen when you put a cheque through an ATM, because the BANK doesn't handle the cheque, except for CIBC, all cheques are for the most part being processed by a 3rd party (Symcor). The only information encoded on a cheque as it goes into a Sorter (IBM 3890) is the $amt, the bank the cheque is drawn on, the branch, the account and finally the sequence number on the cheque. There is no place on the MICR line for cheque's date.

Once the MICR information is captured, no one cares about the date you wrote on it. They only care if the information in the MICR line matches what in on the cheque. If there are differences, the cheque's electronic image is compared to what "the system" says is on the MICR Line. The operator then corrects the MICR information. Ultimately a file is produced at night that is then forwarded to the BANK to withdraw the cash from your account, along with payments made to the BANK to authorize the payments to your account if you're depositing a cheque.

It's up to you to raise blue murder with the branch if your cheques are being cashed before the due date.

 

[hoser1970]

Something to consider!

Remember 25 or 30 years ago, when it took anywhere from 10-20 days for a cheque to clear and you could get access to the money? Today it takes 24-48 hours! Why do you think this is? Automation.

According to the Canadian Payments Association website, in 2008 an average of 22 million payment items PER DAY where processed through the Canadian Payments Association.

http://www.cdnpay.ca/home/home.asp

Even if only 10% of them were actual cheques, this would still be 2.2 million cheques PER DAY! Of course banks cannot physically verify the date on each cheque (or that body & figures match, or the signature). If they were to do so, it would take weeks for a cheque to clear! How many people would be screaming then?

Now, having said that, Banks rely on the customer to be aware of what is going through their account, and when something like this happens, trust that the customer will bring it to their attention to be corrected. Clearly, the OP did this. Unfortunately, the dumbass Bank Manager got on a power trip and tried to blame the OP (the customer). Not very bright!

What should have happened was the manager would confirm that the cheques were post-dated, apologize to the customer and explain why it is physically impossible for the bank to verify every date (see above) and refund the customer the NSF Fees. He may even have offered to issue letters to the payees of the cheques that bounced, explaining it was due to "bank error". I'm guessing if this had of been done the first time King Midas raised the issue, he would have been quite satisfied with outcome.

I completely agree with the others who suggested taking a copy of the text from Mr. Johnson's post in to see the Manager. Or, if you don"t want to deal with him/her anymore, send a copy to the District Vice-President, along with a letter, explaining the situation. All bank's are required to report ANY complaint sent to an Executive to FCAC (Financial Consumer Agency of Canada). Any V.P. who gets a complaint like this, that could not be resolved to the customer's satisfaction at the local (branch) level, will be all over the Manager!

One final point, many banks will not automatically transfer funds from one account to another to cover a cheque, unless the customer has specifically authorized it. Again, it is a question of automation. However, not all customers want this feature. 10 years ago it was fairly commonplace to do this, and you would be amazed how many customers complained! If you want this service set up, speak to your bank,

Disclaimer: I do work in the Financial Services industry. I do not work for CIBC.

 

[thompo69]

Can such grievances be resolved at the Board as opposed to the SCC?

I'm a little unclear on this, but from my reading of the Act, the Board would have jurisdiction provided that the damages incurred do not exceed the greater of $10,000 and the monetary jurisdiction of Small Claims Court. Beyond that you go straight to a court of competent jurisdiction.

I would also point out the decisions of the Board are can be appealed to divisional court, so really, in a protracted dispute resolution would likely be found in the courts rather than the Board, but I don't know how often cases are appealed.

 

[landscaper]

Basically the bank in this case is saying its not their problem. It actually is the cheque they accepted for payment was not a valid instrument. They should have checked, irregardless of the amount of trouble is is for them. The landlord in this case was negligent by depositing a postdated cheque his bank should have caught it when deposited the fact it could have gone in through an atm does not matter both banks are at fault as is the landlord.

If your lease does not say that post dated cheques are required I would immediatly go to the landlord and demand the balance of the cheques back. Make arraingments to either supply cash or cheque prior to the required date or if possible set up automatic withdrawals. Point out to the landlord or his representative that you can not trust them to get it right anymore and supply them with the bills for the returned items and request payment for thier mistake. If payment is not forthcoming go to the rental board and request they allow you to withhold the funds , be prepared to wait it will take a while.

 

[sibannac]

Basically the bank in this case is saying its not their problem. It actually is the cheque they accepted for payment was not a valid instrument.

Again people have a misunderstanding of what responsibilities the Bank has here under the CPA. They have no responsibility to review cheques deposited nor cheques withdrawn. A quick read of even a stop-payment will show language that says that the cheque will be stopped on a best efforts basis.

The fault lies strictly with the depositor.

 

[sibannac]

Again, I don't think a bank will let you stop a post-dated cheque.

I've tried this in the past and the bank refused.

Well in this case the Bank is wrong, they will do it for a fee, like all cheques and will do it on basis that they don't guarantee they will catch it.

Now what becomes tricky are PAD's. Most Banks are reluctant to stop these because when it comes to Landlords they use language that in the PAD contract waives your right to return the item.

 

[oldjones]

The reality is your lease requires post-dated cheques that your landlord handles incompetently. Your best remedy's sorting it out with him, 'cause you can at least talk to his decision-makers, while you have little chance getting to decison-makers at the bank.

He may be miserly enough to resist paying your costs, but still be a reasonable enough guy who'd rather not make further troubles for you or him. What would be the problem of just re-writng the lease to the more common date of the first of the month? Protecting yourself by leaving enough for one rent cheque in the account would also save you grief.

 

[WhaWhaWha]

I have insisted that he return my cheques OR I will cancel all of the remaining ones and deduct the fees for that, as well as the $195 from the Aug chequed.

You're dealing with a Lawyer. You can use that to your advantage. They seldom respond to reason but always respond to paper work. Send him a registered letter today informing him you have closed the account or stopped payment -- anything that concludes with "your post-dated cheques are now worthless". Assure him that if he returns the cheques you will be cover the rent by certified funds, money order, or replacement cheques on time as the dates come up.

 

[bigshot]

If the landlord is being a dick about this, just go and close the account. Tell your bank that you are doing this because they've been dicks too.

Once the account is closed, just give your landlord one cheque on the 15th of each month. What's he going to do? You can't throw someone out of their rented apartment in Ontario (certainly not for failing to pay the rent in advance), and because you will not be in arrears, he's S.O.L.

If you have concerns about renewing the lease, do it right after your next renew, and tell him where to go...

 

[landscaper]

Fee or not, I don't think a bank can put a stop payment on a post-dated cheque because it's akin to some kind of fraudulent intent (they can't be an instrument of a phony promise to pay).

You will find its tied up in the bills of exchange act. You can not be prosecuted for an nsf post dated check provided the account the check was written on is active. It all comes down to the fact that the cheque is a piece of paper until the date that is written on it shows up. The bank is on their own if they cash a post dated check early, and they are responsible for the costs .

 

[fuji]

King Midas: Did you go back to the bank manager with a copy of the payment regulations provided up thread?

I am interested in the outcome of that.

I like stories, I need the ending!

 

[King Midas]

King Midas: Did you go back to the bank manager with a copy of the payment regulations provided up thread?

I am interested in the outcome of that.

I like stories, I need the ending!

Have not had an opportunity yet. Busy with work. I will on Friday.

 

[thompo69]

So can the tenant get prior approval from the Board for setting off any bank charges or penalties as you implied in your previous reply?

I'm not sure I get what you are suggesting. You could not go to the Board and say "If he screws up, can I have permission to deduct costs?" If there actual costs involved, they could get approval prior to deducting them, but not prior to incurring the costs. The one exception I can see would be for maintenance issues where a tenant would seek redress for the landlord's failure to act. Other than that, I believe that the tenant would actually have to have incurred costs prior to seeking remedy.

 

[thompo69]

If the landlord is being a dick about this, just go and close the account. Tell your bank that you are doing this because they've been dicks too.

Once the account is closed, just give your landlord one cheque on the 15th of each month. What's he going to do? You can't throw someone out of their rented apartment in Ontario (certainly not for failing to pay the rent in advance), and because you will not be in arrears, he's S.O.L.

If you have concerns about renewing the lease, do it right after your next renew, and tell him where to go...

And this would not be an issue on renewal. Leases in Ontario automatically renew month-to-month on their expiration, and the same provisions for termination exist (meaning real tough to do).

 

[King Midas]

Update

Just got off the phone with a CIBC Customer Service Rep.

Browsing around on their site earlier tonight, I typed "post-dated cheque" in the CIBC browser and found the following:

What is a post-dated cheque?

A cheque that is dated ahead of the date it’s written is considered to be post-dated and cannot be processed until the day indicated on the cheque. An item may be returned for the reason “post-dated” up to and including the day prior to the due date.

That is posted on CIBC's own website.

That, and the information provided by My Johnson persuaded the CSR to refund [1] the bank fees for the bounced cheques, [2] the $25 each charged by the school and the camp, [3] the $5 fee and all of the interest charged for tapping the overdraft. Got it all back.

Additionally, the CSR I spoke with two weeks ago, who told me nothing could be done, is going to be "corrected".

CSR had the sexiest voice too ... made the entire experience that much more pleasant.

Thanks for the great advice, everyone.

 

[squash500]

Just got off the phone with a CIBC Customer Service Rep.

Browsing around on their site earlier tonight, I typed "post-dated cheque" in the CIBC browser and found the following:

What is a post-dated cheque?

A cheque that is dated ahead of the date it’s written is considered to be post-dated and cannot be processed until the day indicated on the cheque. An item may be returned for the reason “post-dated” up to and including the day prior to the due date.

That is posted on CIBC's own website.

That, and the information provided by My Johnson persuaded the CSR to refund [1] the bank fees for the bounced cheques, [2] the $25 each charged by the school and the camp, [3] the $5 fee and all of the interest charged for tapping the overdraft. Got it all back.

Additionally, the CSR I spoke with two weeks ago, who told me nothing could be done, is going to be "corrected".

CSR had the sexiest voice too ... made the entire experience that much more pleasant.

Thanks for the great advice, everyone.

I'm glad everything worked out for you KM!