The Lemon Fool

Say someone deposits a cheque for a large amount of money (£500,000) in their bank account, then a few days later writes a cheque to someone else for the same amount, and the recipient banks it in their own account. Will anything "intervene" in the process for any kind of money laundering checks?

Everything is above board and legal, just wondering if the normal cheque clearance times will be adhered to.

Scott.

Here is an interesting news article:

https://www.thetelegraphandargus.co.uk/ ... ng-charge/

The T&A was not able to give much detail, but it would appear that drug dealers (or other dodgy characters) bought jewellery for £365 million of which £264 million was in cash. I expect that they then sold the jewellery for clean money.

I would not have thought that a £500K cheque payment would be a money laundering concern. I have had electronic payments of £100K+ coming into my account and going straight out again. That has become more difficult recently, but that is to stop push fraud, not money laundering.

GeoffF100 wrote:That has become more difficult recently, but that is to stop push fraud

So I presume push fraud isn't limited to electronic money transfers and could just as well happen with cheques. So my question again would be - what might intervene in the process I described.

(It's my 87 year old father who is banking then writing the cheque. He has no mobile phone and rarely uses online banking. I'm just wondering what might happen in the process, if anything, as it is likely to get him flustered, so I'd like to be able to prepare him.)

Scott.

My largest cheque payment recently was £50K to my own account with another bank. I just sent of the cheque and everything worked without any hassle. Sending the same sum electronically often gives me lots of hassle. Text message. Phone this number. Hang on the line for ages. Nothing to do with us. Ring another number. It is with the fraud department... It seems to be less trouble if I ring rather than do it online, but sending the money by cheque is easiest.

This might have changed since I was last involved in Retail Banking, but I wouldn't think significantly.

An unusual credit to an account, be that via cheque, BACS or other will get "flagged" for investigation internally at branch level via the credit clearing report run by banks. The money will usually show as in the account though, and if cleared be accessible. Occasionally a credit will get diverted to an internal suspense account at a branch rather than show in an individual's account.

Unsurprisingly these lists are used as much as opportunities for cross-selling deposit accounts and investment products as they are for money laundering checks, but the latter process might occur.

You will much more likely trigger money laundering enquiries at the point of paying in the cheque (or the equivalent keying in a large transaction via electronic banking) than the arrival in the account of the credit via the clearing system.

"Normal" cheque clearing times won't usually be affected. Manual processes such as investigating the report, and physically checking the signature on the cheque against the copy in the account mandate file, will be done on the same day within the clearing cycle. Where it might be less than "normal" is more likely where cheques don't go through clearing, but are "scanned" copied via phone etc. as a more recent method. These will likely go through the system "normally" but the "flag limit" might be alerted (and be lower) and the destination diverted to a suspense account before the ultimate destination as a fraud check (not necessarily a money laundering one).

As everything is above board and legal, you might want to consider forewarning the bank of the transaction. In the same way customers often advise banks of large proceeds from a house sale, or disinvestment of assets, for instance. Similarly some call their credit card company before going abroad to forewarn any fraud enquiries for overseas transactions.

It will be interesting to hear from anyone with a more recent insider view of retail banking than mine though.

dealtn wrote:Where it might be less than "normal" is more likely where cheques don't go through clearing, but are "scanned" copied via phone etc. as a more recent method. These will likely go through the system "normally" but the "flag limit" might be alerted (and be lower) and the destination diverted to a suspense account before the ultimate destination as a fraud check (not necessarily a money laundering one).

I don't know if it's universal, but my banking app has a £500 limit for scanning cheques.

Scott.

GeoffF100 wrote:My largest cheque ...

The largest cheque I ever wrote was "9 figure" sum. Sweaty palms writing that and not make a mistake! (Not for my account though).

We recently paid in a six figure cheque at a self service machine (where the limit was £500,000) as we wanted to avoid queuing for the counter service. The payer had forewarned their bank but still got a call the same day to verify the payment. The cheque cleared swiftly.

In your case, especially given your Father’s age, I wouldn’t be surprised if the bank attempts to verify with him on his outgoing cheque.

Edit: Forewarned for forwarded!

As a first-time house buyer in 2019 with no mortgage, I had to make some large (up to six-figure) payments to/from a current account:
- Incoming, pension 25% lump sum (and other investment realisations).
- Outgoing, payment to my solicitor for deposit and balance.

Knowing this was likely to trigger problems, I discussed this in advance with my banks (and solicitor). My banks took differing views, which determined which current account I was able to use and how. But once I'd had those discussions, the bank had been notified what was going on, and put up no obstacles.

A few years earlier, a mere £15k outgoing had triggered all kinds of grief. Moral: try to tell them in advance what you're doing!