Bianko’s cheque

Have you come across this term before, but you are still not quite clear what a blank cheque actually is? Wikipedia.com defines the meaning of blank cheque as “a cheque that is already signed but does not state the amount or any other details about the payee”.

What is a blank cheque?

A blank cheque is a blank cheque that contains pre-printed information such as the bank name and account number, but does not include the date, amount or payee.

For a better understanding, let’s take an example. Let’s say that this is a business in which the only authorized person who can issue and sign such checks is the owner of the business. He decides to go out of town for a few days. While he is away, he puts a subordinate in charge of the firm, to whom he issues three cheques signed in his (the owner’s) name in case of necessary or unexpected expenses. The owner must have absolute confidence in his employee that he will not attempt to misuse the blank check for his own purposes or lose it, and that it will be used only for relevant company and business-related expenses.

What is a cheque?

A cheque is a document issued by one party (the drawer) to authorise a bank or other financial institution to pay a sum of money to the person or entity named on the cheque (the payee). Cheques are used to transfer money from the issuer’s account to the payee’s account.

The cheque must contain some key information to be valid:

• Name and address of the exhibitor.
• Account number of the issuer.
• The name of the bank or financial institution where the issuer holds its account.
• The name of the payee to whom the money is payable.
• The exact amount of money to be paid, written in words and figures.
• Date of issue.
• Signature of the exhibitor.

The importance and use of cheques varies from country to country and their use has now been replaced in many areas by e-banking and other forms of digital payments. But in some situations, such as payments between large corporations or international transactions, cheques are still used.

Slovak law defining cheques

In Slovakia, the issuance and use of cheques is regulated by the “Bill of Exchange and Cheque Act

” (Act No. 191/1950 Coll.). This law defines what a cheque is, how it is issued and what rights and obligations the persons involved in a cheque transaction have.

It is important to note that while cheques are a common form of payment in some countries, they are relatively rarely used in Slovakia and many business entities do not accept them.

If you have specific questions about the use of cheques in Slovakia or need legal advice, it is advisable to contact a qualified lawyer or financial services professional. You can make arrangements directly with a consultation with our experts.

When is a blank cheque used?

This concept extends beyond financial transactions to any situation where an individual or group is given a free hand to determine their own course of action or decision-making.

How does it work?

The functioning of the blank cheque is therefore based on the principle of trust between the two parties. When someone issues such a cheque and the other party accepts it, the payee of the cheque is automatically entitled to fill in the details of the amount and sign as payee.

The cheque must be completed with all necessary information such as amount, name of payee, date and signature. The payee then presents the cheque to the bank, which checks that it is valid, that it contains the correct account number and that the drawer of the cheque has sufficient funds to cover the amount shown on the cheque. If everything is in order, the bank collects the amount of the cheque and transfers it to the payee’s account.

It is important to remember that the validity of a cheque may be limited to a certain time interval, for example 3 months from the date of issue, so it is important that both parties are aware of these terms and make sure that the cheque will be used within the specified timeframe.

Advantages of blank cheques in the business environment:

• Payment flexibility: allows businesses to tailor payment to the specific transaction and needs of the business partner. They can write a cheque for the exact amount they want to send and later specify the recipient.
• Ease of use: filling out the cheque is easy. Businesses can write it themselves without the need to outsource
• Currency flexibility: since the amount is not predetermined, entrepreneurs can operate with different currencies, which is a significant benefit in international trade agreements where different currencies need to be converted.
• Universality: the blank cheque is a recognised payment document in most countries.

Possible risks associated with their use

Of course, the fact that the blank cheque does not include all the necessary data also involves the risk of misuse. If it falls into the wrong hands, the fraudster may write out a larger amount or give the name of an arbitrary payee.

If the cheque is completely blank, i.e. the signature of the owner of the account from which the amount is withdrawn does not appear on it, the person concerned may forge his signature as well.

Payment may also be rejected or failed if the sender of the blank cheque does not have sufficient funds in his/her account to cover the stated amount.

The most notorious blank cheque abuse in history

One of the most famous cases of blank check abuse in history is the story of Frank Abagnale Jr., which was popularized in the movie Catch Me If You Can, starring Leonardo DiCaprio.

Frank Abagnale Jr. was an American con artist and identity thief who in the 1960s. in the 1920s. successfully defrauded numerous banks by presenting them with forged checks for millions of dollars. Abagnale was known for impersonating various professions, including an airline pilot, a doctor, and a lawyer.

His most famous trick was creating fake checkbooks with Pan American World Airways logos, where he posed as a pilot. He presented these checks for cashing at various locations around the world, earning hundreds of thousands of dollars.

Abagnale was eventually caught and convicted, but after serving his sentence he became a fraud prevention consultant for federal agencies and financial institutions. His story is an example of how a blank check can be misused and highlights the importance of verifying the identity and trustworthiness of the people we give access to our finances.

Safety and security when using blank cheques

• Keep them in a safe place where only authorised persons have access to them.
• It is a good idea to continuously check their number and monitor their use.
• If you are the sender, you should verify the identity of the recipient, especially for large amounts. Verifying identities and signatures can reduce the risk of fraud.
• Regular monitoring of payment accounts and active bookkeeping can help you detect unauthorised money transactions.

Bianco cheque FAQ

Here are some of the most frequently asked questions about the concept of a blank cheque.

What is a blank cheque?

A blank cheque is a cheque that is signed but does not have an amount specified. This gives the other party the opportunity to determine the amount as needed.

Is it safe to sign a blank cheque?

It is usually not safe to sign a blank cheque as it opens up the possibility of misuse. The other party can designate any amount and thus unexpected losses can occur.

In what situations is it appropriate to use a blank cheque?

A blank cheque can be used in situations where it is not possible to determine the exact amount to be paid, but it is important to remember that this should only be done when you fully trust the other party.

What does it mean to give someone a blank cheque in decision-making or power?

Giving someone a blank cheque in decision-making means giving them complete freedom or flexibility to make decisions without the need for the consent or control of others. This can occur, for example, in politics or in the management of a company.

What are the risks associated with providing a blank cheque in the area of decision making?

Risks may include abuse of power, inability to control decisions, lack of transparency and the potential for irresponsible or harmful decisions.

Is it legal to issue a blank cheque?

The legality of issuing a blank cheque varies depending on the country’s legal system. In some jurisdictions it may be legal, but even so it is often considered financially risky and not advisable. It is always best to consult with a bank representative or lawyer when taking such action.

In conclusion

The Bianco cheque is a payment instrument that offers businesses and individuals the benefits of flexibility and speed in making payments, but it is a good idea to use it judiciously and with a degree of caution to avoid potential misuse and theft of funds.