FINANCE Minister Makis Keravnos yesterday said stricter laws were needed to crack down on bouncing cheque offenders, even though official statistics suggested a dramatic decline in the phenomenon since the introduction of the new penalties.
According to figures released by the Central Bank, 4,208 bounced cheques were issued last year, worth a total of £2.6 million. It was a marginal increase on the previous year, when bad cheques amounted to £2.4 million.
The number of offenders blacklisted in 2004 was 1,230 – again, very close to the 1,178 placed on the list in 2003. In both cases, the vast majority of offenders were individuals. In 2004 only 22 per cent of cases were legal entities, showing companies were less prone to the temptation.
Persons issuing bounced cheques are catalogued by the Central Bank’s monitoring data centre, set up in February 2003. Commercial banks are compelled under the law to immediately relay this data to the monitoring centre.
In the event an offender clears the cheque within the deadline, no further action is taken but his/her name remains on a “watch list”. The specific cheque’s details are also kept on file.
People who fail to make good are placed on a blacklist. In such cases, banks will freeze an offender’s current account and demand the person return his chequebook within 10 days.
During this probationary period, no commercial bank or co-op is allowed to open a new current account for a blacklisted person.
More specifically, an individual or legal entity is blacklisted if:
(a) within a period of 12 months they issue at least three bounced cheques, or the total amount of any bounced cheque(s) exceeds £1,000;
(b)
(c) if they have been found guilty and sentenced by court for issuing bad cheques.
(d)
Under the Protection of Personal Information Act, names on the blacklist are not made public, and only banks and the police have the names and details of offenders.
Before tougher laws and measures came into force, it was estimated that more than £200 million was tied up in bounced cheques, while the number of actual bad cheques was said to be in the hundreds of thousands. As such the drop to £2.6 million is extraordinary.
Keravnos yesterday conceded that perhaps current measures were not enough, adding “Perhaps we should also reassess the relevant legislation because upstanding citizens should not fall victim to devious people.”
“It seems banks need to get more austere, and I don’t think this has been the case so far,” he said.
Keravnos said he would first consult with the Pan-Cyprian Association of Commercial Banks.
The association’s director-general George Hadjianastasiou had a slightly different take on the issue, saying that, overall, current measures have been effective. But he told the Cyprus Mail that commercial banks would welcome any new suggestions the government might have.
