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HMRC internal manual

Debt Management and Banking Manual

Returned payments: general overview

Cheque, Bank Giro, and Girobank payments

Payments are returned unpaid by the bank if either the:

  • customer does not have sufficient funds to cover the amount of the payment
  • cheque used to make the payment is incorrectly completed.

Where the customer’s bank returns a cheque as ‘Refer to Drawer - Please Re-present’ or ‘RDPR’, we automatically attempt to collect the payment from the customer’s bank account a second time. Only where the customer fails to have sufficient funds to cover the payment after our second attempt at collection are the cheques returned to DMB Banking as an unpaid.

Where payments are returned unpaid DMB Banking will update the customer’s record to show the payment has been returned by creating a minus posting equal to the amount of the payment. Depending on the Head of Duty, and how the payment was originally allocated, this will be done either by:

  • removing the payment directly from the record through Automatic Remittance Process
  • removing the payment through OAS
  • liaising with the Business Area affected to arrange removal.

Retention of unpaid cheques

We do not routinely return unpaid cheques to the customer. The Dishonoured Cheque Team in DMB Banking retains these cheques for a period of three months and then arranges to destroy them. However, if a customer requests the return of their cheque before it has been destroyed, contact the Dishonoured Cheque Team to arrange this.

Recalls - BACs, Faster Payments, CHAPs, internet, and telephone banking payments

A customer’s bank can ask for a payment to be returned to them where there is something wrong with the original payment, for example it has been sent to the wrong payee. These are known as ‘recalls’.

Where we receive a recall, DMB Banking will update the customer’s record to show the payment has been recalled by removing the payment through OAS.

Direct Debit payments

A bank or building society can refuse payment claimed under a Direct Debit mandate. This is usually because the customer’s account has insufficient funds.

Normally we receive an unpaid notification from the bank before the Receipts Clearing System updates the customer’s record with the payment. Where this happens you will not see a NDDS unpaid posting on the customer’s record. Exceptionally, where we receive a late unpaid notification and the customer’s record has already been updated to show the payment, the Banking Central Direct Debit Team in DMB Banking arrange for the failed credit to be removed from the record.

Where our first attempt to collect payment fails, the National Direct Debit System will normally make a second attempt to collect the payment 14 days after the first collection attempt. The customer is automatically notified of this by letter, giving them the chance to lodge sufficient funds with their bank to meet the payment.