List of cheque defaulters

After notification by the credit institutions indicating the entities with which the decision has been made to terminate the cheque convention,  Banco de Portugal includes such name or designation in the "List of Cheque Defaulters" for a period of two years. The Bank immediately discloses the afore-mentioned inclusion to the credit institutions which receive deposits in accounts opened for such effect (Banks, Caixa Geral de Depósitos, Savings banks, Central Agricultural Credit Bank and mutual agricultural credit banks).
 
In extraordinary circumstances, and in exchange for evidence as to the settlement of the situations determining such termination of the convention, Banco de Portugal may decide to remove the names from the List before the end of the legal period of two years, under proposal of the credit institutions or at the request of the entities in question.
 
Extraordinary circumstances shall mean the variety of reasons that justify and recommend the removal of an entity name from the List, given its need to operate current accounts, while bearing in mind the list of events in its name reported by the credit institutions, and the reasonable assumption that new irregularities qualifying it as a bad cheque user will not be carried out again.

Cheque settlement

Notifications by credit institutions of cheque settlement or termination of the cheque convention are made via registered letter sent to the last domicile indicated to the institution by such entity. Save as otherwise proven, notifications shall be made on the third day following registration (or, if this is not a working day, by the first following working day) and are deemed to have been delivered, even if the notified person refuses to receive the letter or is not at the stated domicile.

Settlement notification should indicate:

• the number of the cheque to be settled, respective amount, account number and branch from where it was drawn;
• settlement deadline and authorised venue (permitting such to be carried out at any branch);
• permitted settlement modalities; consequences of cheque settlement failure.

A returned cheque should be considered settled if, in the drawee credit institution within a period of thirty consecutive days as of reception of the settlement notification:

• it is re-presented by the holder and the amount indicated therein is received or
• a deposit is made by the drawer of sufficient funds that are immediately available or covered by guarantee to the bearer or
• evidence of payment to the beneficiary is presented by the drawer.

In the case of a deposit or direct payment to the bearer, penalty interest is due as of presentation to payment of a cheque, calculated at the legal rate plus ten percentage points. A deposit made to the bearer is captive for a period of six months if, in the meantime, the cheque in question has not been re-presented to payment.
 
A cheque of up to 150€, paid by the credit institution in compliance with its payment obligations, should be considered settled if, within the same period of thirty days:

• a deposit is made to the account of the drawer or an account  specified by the credit institution to the amount indicated therein.

Notification of termination of the cheque convention by registered letter to the last domicile indicated by the account holders is equally obligatory, and shall mention:

• the justifying reasons (for not settling the cheque within the indicated period or for the inclusion of the cheque drawer’s name on the List);
• the compulsory return of all cheques supplied and unused;
• the obligation to abstain from issuing cheques on such and any other credit institution; 
• the possibility of operating current accounts by other means;
• the possibility for non-issuing co-holders to provide evidence of non-involvement in actions leading to such termination, by presenting suitable means of evidence; 
• the duty with which the drawee institution is entrusted to annul such termination if the co-holders present the afore-mentioned evidence. If done within a period of 10 working days after notification of termination, it will not be communicated to Banco de Portugal.

Removal requests

Any credit institution may request removal from the List of the name of entities with which it has terminated the cheque convention via computer means made available by Banco de Portugal, by setting out the justifying reasons and provided that evidence of settlement of all issued cheques has been given and unused cheques have been returned.

The entities in question may also apply to Banco de Portugal for the removal of their names from the List, after providing evidence to drawee credit institutions of the settlement of all cheques issued by them and the return of all unused cheques, as well as presenting justifiable reasons for the need to use cheques as a form of payment.

So as to be analysed, all the above-mentioned requests should unequivocally identify the entities in question, describing the justifying circumstances and referring to the said cheque settlement and cheque return.

Such requests should be remitted to the closest Banco de Portugal branch, with indication of a full address for response and the signature of each applicant, in accordance with the attached copy (front and back) of the respective ID.

In view of all such requirements, the decision of Banco de Portugal will be sent to the applicant in writing and immediately disseminated throughout the entire banking system.

Requests for annulment of inclusion on the list of cheque defaulters

In the case of accounts with more than one holder, termination of the cheque convention is extensible to all co-holders. However, such should be annulled in relation to those who provide evidence to their bank of non-involvement in the actions leading to the decision to terminate the convention and their inclusion on the List. Should such occur, the credit institution itself should apply to Banco de Portugal for the elimination of previously disclosed information, through electronic means made available for such effect. In the same way, credit institutions should apply to Banco de Portugal for elimination of such information, if it has been miss-sent.

In any case, annulment of inclusion on the List is immediately disseminated by Banco de Portugal to all credit institutions which, according to previous instructions, shall consider termination of the convention to be without effect and  should also purge any commercial note which, due to inclusion on the List, may continue in its records.
 
For more information, see the Bank Customer Website and the booklet of Banco de Portugal entitled "Cheques - Restrição ao seu Uso" (Cheques – Prohibition of the use of cheques).