Free advice you can bank on (for a fee)

CENTRAL Clearing Bank Friendly Advice Centre here. Can I help you ?

Well, I need some help with the latest banking practices . . .

Certainly. Free advice is what we are here to give.

Er, yes. Well, I recently received a note in my cheque book.

A bank note?

No, a printed note.

A pity. If it were a bank note, you would have been able to open a new account with us called an Open and Easy Account. This new kind of account allows 24- hour access.

By me?

No, not by you, actually. By us. That way, we can withdraw any fees or interest due to us. Or, of course, not due to us.

Well, it wasn't a bank note. It was a printed note, saying that the wording on my cheques has been changed. Instead of the top line saying 'Pay . . . or order', it will in future say 'Pay . . . only'. And the words 'Account Payee' are now printed across the middle of the cheque. Why have things been changed?

To guard against fraud. There are lots of people about nowadays who would stop at nothing to lay their hands on your money.

What kind of people?

Oh, accountants, receivers, chairmen of banks, people like that . . .

How do these changes prevent fraud?

Well, in the old days you could change the payee's name on the cheque, if the payee endorsed it on the back, and get it paid into your account.

What was wrong with that?

Well, it turned a cheque into something like a bank note, which the customer could handle off his own bat. This represented an inimical trend.

You mean, it took work away from the banks? And gave the customer a degree of independence that you couldn't control?

As I said, it was an inimical trend. But it safeguards you as well. For instance, if you paid a cheque out now to 'Virgin Atlantic', there is no way in which your bank could change the payee's name to British Airways, and pay the money to BA.

Why on earth would they want to do that?

I have no idea.

No, that's not good enough. You thought of the example.

Well, if, for example, the bank had a private arrangement with British Airways.

The idea is ludicrous.

Of course it is. I'm sorry I even mentioned it.

The writer A P Herbert once discovered that a cheque does not have to be written on a prescribed piece of paper. It can be written on anything. Indeed, he once tested this by cashing a cheque written on a cow, and the bank accepted it. Is this still true?

We would still accept a cheque written on a cow, yes . . .

Good.

. . . if the cow had 'Account Payee' printed on the side.

Ah.

And if the cow could be processed through one of our high- speed cheque scanning devices without stopping the machine.

Oh.

And if we were allowed to keep the cow.

I see.

And later charge the customer heavily for all the expenses involved in processing the cow.

I see. Do you still get unorthodox requests like this?

From time to time. The other day we had a cheque drawn by a cabinet minister on the side of a Raffles cigarette packet.

Good heavens. That's

unusual.

Yes. Actually, the unusual bit was the amount. It was for pounds 3bn. So we called him in for a chat.

What did he say?

Come now, this sort of information is highly confidential.

Go on, tell me]

Oh, OK. He said, 'I want to spend it on a useless, irrecoverable defence of sterling.'

Wow.

Exactly. So we said, 'Fair enough.' After all, we've been doing the same for years on foreign loans, so we knew the form.

You gave him the pounds 3bn?

Sure. But we're not complete fools. We kept the packet of Raffles cigarettes.

Moving on to interest charges, I wonder if you could explain why the windfall of lower interest rates has not been passed on to the public, as the Chancellor expressly stated he wished?

I'm afraid this interview has now been concluded. The charge for consultation will be deducted from your account.

But you said it was a free

service]

That is what a bank means when it says a service is free.

Thank you.

Not at all. Thank you.