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| - A widely shared Facebook post claims that a debt will be written off if legal tender—cash—is offered but refused. However, this isn’t the case.
The post, which has been shared over 500 times, says: “Did you know? If you offer legal tender to clear a debt and it is refused, the debt is cleared from that moment.
“So if you go into a petrol station and fill up with £100 and offer to pay with legal tender and they refuse it, they are clearing the debt and you now owe nothing.”
However, there is no obligation on businesses to accept cash payments. Legal tender has a narrow definition, meaning that you cannot be sued for non-payment if you pay ‘into court’ in legal tender. This does not apply to normal transactions.
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What is legal tender?
The Currency and Bank Notes Act 1954 means Bank of England bank notes are legal tender in England and Wales and the Coinage Act 1971 means Royal Mint coins are legal tender throughout the UK—with certain limitations for small coins.
It’s completely lawful for individual businesses, such as shops, to decline certain forms of payment, like cash, or card, and we’ve previously fact checked posts falsely claiming this is illegal.
The Royal Mint adds that cash being legal tender does not mean “that any ordinary transaction has to take place in legal tender”. It describes legal tender as having “a very narrow and technical meaning in the settlement of debts”.
“It means that a debtor cannot successfully be sued for non-payment if they pay into court in legal tender,” the Royal Mint guidelines state. Paying into court refers to money paid to the court by the defendant for payment to the claimant.
If a person had filled up their car with £100 of petrol, as the example in the post claims, and then offered cash but was refused, the fuel would not become theirs.
Instead, they would likely be asked to fill out a form, often called a ‘no means of payment’ form, which would require them to pay back the cost of the petrol within a specific timeframe, such as seven days.
West Midlands Police says that if someone is unable to pay for fuel it is a civil and not a criminal matter. But if a person fills up without any intention to pay and then drives off, it is a type of theft.
No plans to stop shops refusing cash
In April 2022 the government responded to a petition asking it to make it unlawful for shops to refuse cash payments, saying: “The government does not plan to mandate cash acceptance.
“While the government recognises the ability to transact in cash remains important to millions of people across the UK, particularly those in vulnerable groups, it remains the choice of individual businesses as to whether to accept or decline any form of payment, including cash or card. This may be based on factors such as customer preference and cost.”
Misleading claims about money and payments can cause financial uncertainty, which can be especially harmful to people facing economic hardship.
We’ve previously written about other false claims regarding cash, including that the World Health Organisation advised people to use contactless during the Covid-19 pandemic, and that it’s illegal for businesses to refuse cash in France.
Image courtesy of lensicle
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