Cashing a cheque sir? Sign here, here, here and...

Dropped into town on Saturday with a pal who has single-handedly jiggered up his banking arrangements with just about every bank on the high street - and then some.

So it was that I found myself at the Money Shop, a national chain of next-generation pawn shops, who also allow customers to cash their cheques, even those that are crossed A/C Payee - Not Negotiable.

I won't bore you with the minutia, but crossed cheques cannot normally be negotiated for cash, as they are non negotiable instruments as defined under the Bills of Exchange Act and the Cheques Act.

The Moneyshop and other shops of their ilk manoeuvre around this ageing Act by opening `instant' bank accounts for customers and then allowing them to go `overdrawn' the value of the cheque they want to cash.

When the cheque clears, their balance is reduced to zero and everyone's happy. Well, kind of, as the shop takes an arrangement fee, anywhere between 6 and 15 per cent, of of the cheque value.

They also require ID from the customers. Lots of ID. Like three items and will only accept cheques for instant cash payments from selected major companies, including, of course, the DSS and other government departments.

So what happens if a cheque bounces, for whatever reason?

Interestingly, the customer isn't always liable, as some of the commission the customer pays apparently goes towards an insurance policy against the cheque being fraudulent or similar.

Which is why Money Shops asks for two or even three forms of ID from its customers, as security against fraud and other nasties.

My pal cashed his cheque and paid a whopping 8 per cent commission, which I thought a tad steep, so I asked the assistant what APR the company charged on its cheque cashing arrangements.

On a typical £100 cheque transaction, the commission is 15.00, which, it says here, equates to an APR of 441.1 per cent.

Words fail me!...