A New Zealander caught out trying to use cheques from a bogus UK bank has sparked warnings from the Banking Ombudsman.
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The Banking Ombudsman Scheme investigated a complaint against a New Zealand bank that refused to honour a customer’s cheque.
“In short, our investigation revealed the ‘cheque’ was not actually a cheque because the issuing ‘bank’ was not actually a bank,” Banking Ombudsman Nicola Sladden said.
WeRe Bank was set up in the United Kingdom last year and claims to have its own currency – the “Re”. Customers send the bank a promissory note (a legally binding IOU) of £150,000 and pay a £10 monthly membership fee.
WeRe Bank supplies customers with cheque books to write “cheques” drawn against their promissory note to pay debts. However, the cheques aren’t legal tender, so its customers’ debts aren’t paid. WeRe isn’t a registered bank or even a company, but is run online.
“Because WeRe cheques are worthless, customers’ attempts to repay debt with these cheques are not successful and so people face all the risks of late payment, from additional charges to repossession,” Ms Sladden said.
The Banking Ombudsman said this is the first complaint involving a New Zealand customer that it’s aware of. Canada and the United Kingdom have dealt with cases and determined the cheques aren’t legal.