Document ID: chunk:federal_register_of_legislation:C2017C00074:section:95:p1
Version: federal_register_of_legislation:C2017C00074
Segment Type: section
Provision Reference: s 95 (pt 1/2)
Character Range: 93257–95905

95  Protection of institution collecting cheque for customer or another institution
 (1) Where:
 (a) a financial institution (the collecting institution), in good faith and without negligence:
 (i) receives payment of a cheque for a customer; or
 (ii) receives payment of a cheque and, before or after receiving payment, credits a customer's account with the sum ordered to be paid by the cheque; and
 (b) the customer has no title, or has a defective title, to the cheque;
the collecting institution does not incur any liability to the true owner by reason only of having received payment of the cheque.
 (2) Where:
 (a) a financial institution (the collecting institution):
 (i) receives payment of a cheque for a customer; or
 (ii) receives payment of a cheque and, before or after receiving payment, credits a customer's account with the sum ordered to be paid by the cheque;
 (b) the cheque is a cheque drawn payable to order that has not been transferred by negotiation; and
 (c) the name specified in the cheque as the name of the payee:
 (i) is the same as the name of the customer;
 (ii) is the same as a business name or trade name of the customer; or
 (iii) is so similar to the name of the customer, or a business name or trade name of the customer, that it is reasonable in all the circumstances for the collecting institution to have assumed that the customer was the person intended by the drawer to be the payee;
the collecting institution shall not be treated, for the purposes of subsection (1), as having been negligent by reason only of its failure to concern itself with the absence of, or irregularity in, an indorsement of the cheque.
 (3) Where a financial institution (the collecting agent), in good faith and without negligence:
 (a) receives payment of a cheque for another financial institution or for an FCA institution; or
 (b) receives payment of a cheque and, before or after receiving payment, pays another financial institution or an FCA institution the sum ordered to be paid by the cheque;
the collecting agent does not incur any liability to the true owner by reason only of having received payment of the cheque.
 (4) Where:
 (a) a financial institution (the collecting agent):
 (i) receives payment of a cheque for another financial institution or for an FCA institution; or
 (ii) receives payment of a cheque and, before or after receiving payment, pays another financial institution or an FCA institution the sum ordered to be paid by the cheque; and
 (b) the cheque is a cheque drawn payable to order that has not been transferred by negotiation;
the collecting agent shall not be treated, for the purposes