Trouble with bad cheques bounces back

THE SUPREME COURT’S ruling that post-dated cheques are not cheques in the eyes of the law is yet another set-back in the authorities’ efforts to put an end to the widespread phenomenon of bouncing cheques. But even if the legal validity of post-dated cheques has been ruled non-existent, their ability to bounce remains. The only difference now, is that the beneficiary will have no recourse to the law and therefore no means to make the signatory honour the payment.

The ruling means that all cases brought against signatories of bouncing cheques will have to be withdrawn as the issuer is no longer criminally liable. It also renders superfluous the blacklist that was introduced by the Central Bank in order to stop the practice, while the names of those placed on the list will now be removed. In short we are back to square one, with authorities legally unable to take an action against the culprits.

Will the problem take the dimensions it had in the past, when the total value of bounced cheques exceeded the £100 million mark, now that there is no legal protection for the beneficiary? The truth is that the problem had never gone away as legal action was complicated and took years to complete. The blacklist was recently introduced so it is difficult to know how effective it would have been in stamping out the practice.

For now, the only answer is for businesses to be more extra-cautious because the number of people who issue cheques that bounce is bound to increase.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.