> As I understand it, a cheque doesn't "clear" until the recipient bank has received the money from the sending
> bank, usually taking about three "business days" in the process when it's within a banking system (longer if
> it's going between banking systems).  At this point the transaction is complete.

I think the confusion here is in the word "clear".

A bank in the US at least will frequently put money in your account
before the check truly clears.  For example, I write Billy Bob a check,
he puts it in his account.  Later that day, he checks the ATM balance,
and my check shows up added to his balance.  He withdraws all the
money in his account.  Then my check gets to my bank.  My account
is empty, so my bank returns it to his bank.  His bank deducts the
cash from his account, overdrafting him.  Bada-bing, a check that
"cleared" but really didn't.  Of course, now that things have gone
electronic, this whole thing is getting less and less likely.

For an example of the tremendous humor this sort of thing can cause,
see http://tinyurl.com/f1tl 

Mike H.
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