Ask the expert: Cheque rules

Cheque rules changed in 1992

My brother is a writer who receives royalty cheques. He owes me a fair amount of money and we have agreed that the best way to pay me back is to give them to me. He doesn't want to cash them in his own bank first - I don't know why - and they will not make out the cheques in my name. Is there any means of paying in a cheque addressed to him into a account in my name?
Name withheld

Sandra Quinn, director of corporate communications, Association for Payment Clearing Services (Apacs):

Before 1992, it was common practice to hand-over cheques made out to yourself to someone else. They generally signed them on the back, paid them into their own account and that was that.

In 1992, however, the law changed and made it obligatory that all cheques had to be crossed (you'll see crossing lines and account payee printed across the front of all cheques) - essentially this was done to counter increasing fraud.

This means that it is at the risk of the bank to accept a crossed cheque into someone else's account when it is written in favour of somebody else, which means that banks don't generally accept them.

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In the last 10 years a number of cheque encashment agencies have sprung up on the high street to carry out this role (as well as their other role which is handing out cash advances on pay-day cheques).

These agencies accept the risk that the original cheque may be fraudulent and to counter this risk they charge an upfront fee.

This tends to be a percentage of the value of the cheque - unsurprisingly the higher the value, the higher the risk.

Apart from persuading your brother to pay you by alternative means, this would be your only option to get the value of these cheques yourself.

If you're going to use one of these agencies, they do operate a code of practice developed by the British Cheque Cashers Association (BCCA), so look out for one which is a member of the BCCA.

Sandra Quinn, director of communications, Apacs

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