More than 2,000 retail outlets in the Republic use a global payment services provider based in Britain to authorise cheques. Many of the stores are operated by British multiples.

The Irish Payments Services Organisation and the main banks have no connection with the payment services company Certegy Cheque Services. Standalone systems such as Certegy's are not encouraged or recommended by the Irish organisation. There is no equivalent Irish-based service.

One customer of Habitat, the furniture and interior design shop in Dublin, was furious when her cheque for £170 (€216) was refused because she had "no credit history".

Habitat is one of 2,100 stores in the State that use Certegy Cheque Services.

Personal cheques are only guaranteed for £100. A retailer that accepts a cheque for more than that amount is taking it at its own commercial risk. There is no standard practice for accepting or rejecting cheques higher than the guarantee in the retail trade.

Habitat's customer, Ms TP, wrote the £170 cheque in payment for an item to be delivered in four to six weeks. The shop assistant attempted to make a phonecall with Ms TP's cheque guarantee card in her hand. She could not get through to the number she was calling so she took the cheque card number and said Ms TP could leave.

A quarter of an hour later, Ms TP received a call informing her that there was a problem with her cheque and asking her to return to the store to sort it out.

When Ms TP returned to Habitat, she was told that the credit control company wanted to ask her some questions. The shop assistant made a call and handed the phone to the customer.

The person on the other end of the phone explained to Ms TP that he was speaking to her from an independent cheque guarantee company with nothing to do with her bank. He said he needed to get some personal details from her but did not give his name or the company name.

Ms TP was asked to give her full name, address and telephone number. When she was asked for the full code for her home number she realised the person she was speaking to was not locally based. She established that he was speaking from England.

After being on hold for a few minutes, the man came back and told Ms TP that they could not guarantee her cheque.

When she asked him on what this decision was based, he said it was the fact that she had no credit history.

Ms TP was angry at this stage, pointing out to the company representative that she could not possibly have a credit history in Britain as she had never lived there.

Ms TP persisted in asking the man on what basis he was making the decision and finally he explained that it was because her account was a "new account". When she asked him how he had established this fact he replied that it was because the cheque she had written was only cheque number five.

Certegy may decline clearance for what it identifies as "high-risk new accounts" and this is where Ms TP was probably caught out.

After the call, the shop assistant said she would put the cheque through and see what happened. The next morning she called to say she was sorry but Habitat could not accept the cheque. Ms TP was invited to come to the store and use an alternative payment method.

The customer declined this offer and decided not to proceed with the purchase.

What she really wants to know is how can the company that Habitat uses for cheque clearance make accurate credit decisions about Irish shoppers when they have no access to any data on them?

According to Certegy, which authorised $28 billion (€30.8 billion) of cheque transactions worldwide last year, it approves and guarantees more than 98 per cent of all calls. Certegy points out that it does not have access to bank accounts and only advises its customers as to which cheque transactions it will or will not guarantee.

The decision whether to proceed with a cheque transaction or not lies with Certegy's customers, in this case Habitat.

In a statement, Certegy explained that its database includes:

Customer spending patterns, making it easy to identify a customer's proven track record or recent, unusual shopping trends that may indicate potential fraud;

Customers who previously passed invalid cheques or match as a current Certegy debtor;

Information on lost or stolen cheque cards.

The company claims its "extensive database and advanced analysis methods" allow it to develop models for velocity of spending, purchasing behaviour, geographical analysis and individual branch risk.

Certegy also identifies and monitors what it calls high-risk new accounts, sudden increases in spending, unusual purchases and over-trading.