Banks refused legal tender coins by the UK Royal Mint

[Big A.D.]

so what about our $200 gold coins? I know a lot of people buy them because they are under the belief that worse case scenario they are worth $200?

If gold ever drops below $678 AUD per oz the $200 face value becomes relevant. If it did drop that low it would be a worse case scenario.

Gold did drop below AUD$678 and lots of people cashed them in at their local bank branches. There's a few members here with scans of their old deposit slips.

Apparently our banks weren't arseholes about it and either sent them back to the mint or just stuffed them in the back of their vaults and forgot about them. Can't remember who it was, but someone here scored half a dozen $200 coins and some pre-decimal for face value from a branch in some country/regional area that had been sitting on them for decades.

 

[serial]

My god, why are people so afraid of banks! They have to accept any legal tender for face be it a $200 coin or a bag of florins (20cent coins)

 

[willrocks]

My god, why are people so afraid of banks! They have to accept any legal tender for face be it a $200 coin or a bag of florins (20cent coins)

I think disillusioned is the correct word.

 

[serial]

You know I shouldn't complain, I recently purchased some Olympic $5 bronze coins in perfect condition from cash converters for $4 because people don't realise they can bank them for $5

 

[willrocks]

You know I shouldn't complain, I recently purchased some Olympic $5 bronze coins in perfect condition from cash converters for $4 because people don't realise they can bank them for $5

So did the bank accept them?

 

[serial]

These are perfect, so I will keep them however I have recently deposited some crappy 1988 $5 coins no problem

 

[johnnyhann]

interesting indeed!

 

[CFP]

.

 

[bron suchecki]

Surprises me that legal tender can only be forced to accept for a debt in court. In that case the guy should not pay his credit card, let HSBC take him to court and then he can pay the debt with those coins.

 

[willrocks]

Surprises me that legal tender can only be forced to accept for a debt in court. In that case the guy should not pay his credit card, let HSBC take him to court and then he can pay the debt with those coins.

Do you mean by court order, or an actual physical exchange in court?

 

[bron suchecki]

I assume the court would order that he pay the debt then yes he can then pay HSBC with his physical legal tender which they originally refused to accept

 

[The Crow]

I assume the court would order that he pay the debt then yes he can then pay HSBC with his physical legal tender which they originally refused to accept

Plus court costs and solicitors fees, etc. Could easily end up being a penalty greater than 20% of debt

 

[The Crow]

My god, why are people so afraid of banks! They have to accept any legal tender for face be it a $200 coin or a bag of florins (20cent coins)

I think the point is around the definition of legal tender. This story is about legal tender coins that banks can refuse to accept.

 

[Court Jester]

I assume the court would order that he pay the debt then yes he can then pay HSBC with his physical legal tender which they originally refused to accept

Plus court costs and solicitors fees, etc. Could easily end up being a penalty greater than 20% of debt

and the bad mark on his credit file as a default, he may not get another credit card.

 

[serial]

He can start the action in court based on breech of contract. Then force the issue without being a defendant. Basicly nothing is free and those frequent fly points will cost him time and legal cost

 

[bron suchecki]

Plus court costs and solicitors fees, etc. Could easily end up being a penalty greater than 20% of debt

Yes, but 1) its a way to get rid of all those coins and 2) a fck u to the bank 3) tell the bank this is how you are going to play it and they may compromise to avoid the hassle.

 

[willrocks]

If you win the case usually you'll be awarded costs that cover court costs, solicitors fees ... etc.

If it's under 10K take it to small-claims court yourself. Even if you lose you'll only need to pay very limited court costs (i.e. not the other parties solicitor ... etc).

 

[bron suchecki]

FYI, this "innovation" started some ten years ago when the French Mint started issuing what they called "face value coins". IMO they make no commercial sense when you consider they represent a contingent liability to the mint/government, that is why face values on bullion coins have traditionally been way below metal value.

If these mints are faced with massive requests for face value redemption they will be bankrupt. This "they are not circulating legal tender" argument is the first attempt at avoiding this problem, when push comes to shove the other trick they have is to demonetise the coins. Such an action IMO runs the risk of discrediting the whole idea of commemorative precious metal coins and could be collectible PM coins' "stamp" tipping/jump the shark point as many would consider making the coins irredeemable at face value fraud and turn them off coins forever. Stamp collecting was killed by too many being issued, which some here have speculated is a risk for PM coins, but maybe these dollar for dollar coins may be the cause, particularly if they are attracting general public interest.

 

[Court Jester]

FYI, this "innovation" started some ten years ago when the French Mint started issuing what they called "face value coins". IMO they make no commercial sense when you consider they represent a contingent liability to the mint/government, that is why face values on bullion coins have traditionally been way below metal value.

If these mints are faced with massive requests for face value redemption they will be bankrupt. This "they are not circulating legal tender" argument is the first attempt at avoiding this problem, when push comes to shove the other trick they have is to demonetise the coins. Such an action IMO runs the risk of discrediting the whole idea of commemorative precious metal coins and could be collectible PM coins' "stamp" tipping/jump the shark point as many would consider making the coins irredeemable at face value fraud and turn them off coins forever. Stamp collecting was killed by too many being issued, which some here have speculated is a risk for PM coins, but maybe these dollar for dollar coins may be the cause, particularly if they are attracting general public interest.

if they went down the route of de monetising the coins wouldn't they need to give a notice period so you could cash them in if you wanted to at face value?

 

[Tacrezod]

"Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. In order to comply with the very strict rules governing an actual legal tender it is necessary, for example, actually to offer the exact amount due because no change can be demanded.
In practice, people are free to accept whatever they wish as payment. Cheques and cards are routinely accepted as payment. Similarly, a party may accept euros, dollars or any other currency. Someone may agree to give change (and usually will). A person may agree to accept stamps, savings certificates or even goods as payment. The point is that a person may agree to these arrangements, but does not have to agree."
*Snip*
"A debt is not discharged if you offer legal tender and it is refused. The debt remains outstanding (at least for six years). However having a cash payment refused is a good defence if accused of not paying a debt. Refusing cash is, strictly, a breach of contract."

Source;
http://robertleach.co.uk/wp-content/uploads/2011/05/Quick-guide-to-legal-tender3.pdf