Insurance company cancels check 2 months after I deposit it UPDATE

[BarkingGhostar]

This sounds like a banking issue and not an insurance company issue. I guess next time you will know to open a new account, deposit the check into it, let it clear, remove the funds as cash, closing the new account. Viola!

PS: Make sure the bank in which the new account is opened at doesn't have another one of your accounts. This to minimize Bankmeister from coming back to you. 🙂

 

[BeauJangles]

People can also deposit a check before the data on the check, so you can't postdate.

I figured this out the hard way. I sent my landlord 3 months worth of rent checks postdated for the correct month (I was going out of town). My landlord cashed them all right after she got them, which really screwed up my finances.

I went to the bank to complain and they said the date on the check doesn't really mean anything.

That has zero to do with what happened for the OP. After five days, even if the bank made a mistake, they usually will not reverse a check payment. Take, for example, that guy who cashed one of those "YOU COULD HAVE WON $97,000 if you just did x" fake checks that come in the mail. Even though it clearly says "void" on it, he cashed it. The bank didn't catch the "void" and the company didn't complain until about a week later, when the bank told them that after three to five days, the transactions are final and cannot be reversed.

 

[Azraele]

Did the insurance company say why they stopped payment in the first place?

At any rate, I hope it works out for you.

Exactly. It can take months to spot fraud, forgery, or other similar problems. Yet so many people deposit a check and try to spend it the next day.

Most people can't wait months to make sure it's all ok. And while waiting a few days is fine, the OP had this happen 2 months later. How long should people be waiting?

 

[dullard]

Most people can't wait months to make sure it's all ok. And while waiting a few days is fine, the OP had this happen 2 months later. How long should people be waiting?

In most cases, 2 months is too long, I agree. But, most people should strive to have $2000 in their account at all times. That is how big an emergency fund needs to be. $2000 will replace almost anything broken in the house, $2000 will repair almost any broken car part, $2000 will cover your expenses for a month if there is a banking problem, etc. If your emergency is more than $2000, you need to adjust the types of insurance you carry. If Princess Ida had that $2000 emergency fund, then this wouldn't be an issue.

I know $2000 is hard to fathom for some people. But, really, all they need to do is find a way to delay all purchases for a month, just once in their life. It isn't impossible to reach.

 

[Jzero]

It can take months to spot fraud, forgery, or other similar problems.

It's pretty much the exact mechanism that 419/Nigerian/Advanced Fee fraud schemes work. I send you a fake check, you deposit it, even wait for it to clear. As soon as it clears, you send me my share. 6 months later the fraud is spotted, the bank yoinks the money.

Yet so many people deposit a check and try to spend it the next day.

The banks are complicit in this...if I deposit a check drawn from my bank, the funds are immediately available for withdrawal. I know people want their money ASAP, but at the same time once the bank tells you that the money is available for you to use there should be some process that must be followed before they can just pull money that may have already been spent in good faith out of the account. If they cannot be certain a check is valid, perhaps they should not post the money to the account. The customers might not be happy with this, but they will be a lot happier than "Princess Ida" here when something like this happens!

 

[Jzero]

In most cases, 2 months is too long, I agree. But, most people should strive to have $2000 in their account at all times. That is how big an emergency fund needs to be. $2000 will replace almost anything broken in the house, $2000 will repair almost any broken car part, $2000 will cover your expenses for a month if there is a banking problem, etc. If your emergency is more than $2000, you need to adjust the types of insurance you carry. If Princess Ida had that $2000 emergency fund, then this wouldn't be an issue.

One problem with this - I don't keep my emergency fund in my checking account. I don't keep much in my non-interest-bearing checking account at all. I'd still potentially bounce an MST of checks/EFTs and rack up an MST of NSF fees. It would be an allout clusterfuck, but I just can't justify having my "emergency" savings account both no bearing interest (however little it is) and easily accessible in the event of ATM skimming, stolen checkbook, etc.

 

[Eli]

LOL i love threads like this... all the people outraged at how a bank can remove money after its been deposited... so many people have no clue how banks and clearing houses work.

Here's a little piece of information...
It can take up to 6 months for a bank to actually get the real information on a check. You can deposit a check today... and 6 months from the bank can remove it from your accout for insufficient funds because the issuing bank doesnt have the funds in the account to clear the check.

6 months? In this age of technology? uh.. lol

Maybe if the issuing bank is in Botswana and only does business by carrier pigeon.

 

[GuitarDaddy]

Something about this story doesn't add up.

If the OP's facts are correct her bank has seriously breached stop payment and check clearing rules. She should contact state bank regulators and file a complaint immediately.
I suspect there is more to the story than is being told.

 

[preslove]

LOL i love threads like this... all the people outraged at how a bank can remove money after its been deposited... so many people have no clue how banks and clearing houses work.

Here's a little piece of information...
It can take up to 6 months for a bank to actually get the real information on a check. You can deposit a check today... and 6 months from the bank can remove it from your accout for insufficient funds because the issuing bank doesnt have the funds in the account to clear the check.

Considering the current IT technology available to banks, this is something that should be legislated away. That's just a bullshit scam.

 

[dullard]

One problem with this - I don't keep my emergency fund in my checking account. I don't keep much in my non-interest-bearing checking account at all. I'd still potentially bounce an MST of checks/EFTs and rack up an MST of NSF fees. It would be an allout clusterfuck, but I just can't justify having my "emergency" savings account both no bearing interest (however little it is) and easily accessible in the event of ATM skimming, stolen checkbook, etc.

While it is great to try to maximize interest, and I also try to do so if possible, I think you overestimate the impact on your life.

Suppose you found a great savings account that paid 2% more than a crappy checking account. That is possibly doable now, but you'd be jumping through a few hoops to get it. What do you gain in the end? Having the $2000 emergency money out of the checking account would net you an additional $2416 over the next 40 years. But, inflation adjusted, that is only worth $634 in todays dollars. If you have a typical family income of about $1000/week, that means you must work about three days longer to earn that $634.

I don't think working 3 days less in your whole lifetime is worth the hassle of trying to chase the best interest rate for 40 years and risking problems like Princess Ida had.

 

[PingSpike]

Exactly. It can take months to spot fraud, forgery, or other similar problems. Yet so many people deposit a check and try to spend it the next day.

Honestly, what is one suppose to do? Keep 6 months of a buffer in the checking account just in case? (Yes, I realize that you'd only need a buffer for the largest check...although apparently all checks are potentially able to disappear from your balance for that time period.)

 

[Jzero]

Perhaps I placed too much emphasis on the interest by mentioning it twice. The absolute dearth of security on checking accounts is a larger motivator. If my checking account is compromised today, I will be highly irritated, but I will still be able to make my mortgage, car payment etc at worst a few days late.

If I had everything in my checking account and it was compromised, I'd be highly irritated AND I'd not be able pay a single creditor until it's resolved.

 

[alkemyst]

Without at least 6 months of living expenses one is truly living paycheck to paycheck.

Problem today is everyone figures someone else will bail them out.

 

[spaceman]

While it is great to try to maximize interest, and I also try to do so if possible, I think you overestimate the impact on your life.

Suppose you found a great savings account that paid 2% more than a crappy checking account. That is possibly doable now, but you'd be jumping through a few hoops to get it. What do you gain in the end? Having the $2000 emergency money out of the checking account would net you an additional $2416 over the next 40 years. But, inflation adjusted, that is only worth $634 in todays dollars. If you have a typical family income of about $1000/week, that means you must work about three days longer to earn that $634.

I don't think working 3 days less in your whole lifetime is worth the hassle of trying to chase the best interest rate for 40 years and risking problems like Princess Ida had.

you are a wise man
imo dullard
ive always thought as much
ty

 

[dullard]

Honestly, what is one suppose to do? Keep 6 months of a buffer in the checking account just in case? (Yes, I realize that you'd only need a buffer for the largest check...although apparently all checks are potentially able to disappear from your balance for that time period.)

There is no perfect buffer. Suppose all of your paychecks going back who-knows-how-long were cancelled. Few people will ever be in a situation to have that covered in their bank account. Luckilly, situations like that almost never happen. You can't be ready for everything, but you can be ready for any reasonbly common problem.

I'm a big fan of keeping $2000 in checking, since that will cover most emergencies and most banking issues. If you have an expensive mortgage and need to pay more than $2000 a month, then bump it up accordingly.

Then I'm a big fan of putting the rest of your money in a location with a good yield. It doesn't have to be in checking or savings. It could be in stocks or in your house equity. But, be certain that you have your butt covered before you get into trouble. Have a line of credit ready. Have someone willing to give you a loan on an asset. Have family members if needed. Have a pile of cash. Whatever you can manage. The $2000 will cover you for a month or so (put the rest of your bills on a CC). Then tap your safety net if you need more (although proper insurance would prevent that need in most cases).

you are a wise man

Thanks for the kind words.

 

[BW86]

Damn dude, that sucks

 

[alfa147x]

Cash the check at one bank then deposit the cash in bank2!

 

[gorcorps]

I'm too numb to properly rant. Feel free to mentally add whatever embellishments you want to give it the proper fury and disbelief.

Couple months ago the insurance company sent me a $2000+ check, I deposit it, it clears, everything is fine.

Today my landlord calls, my rent check bounced (and i was really late with it anyway). I look at my bank account online, what is this negative balance???? Go over to my bank, they tell me that the insurance company stopped payment on the check, after they said it cleared.

Huh? Yes, evidently they can do that.

Insurance company is supposedly sending another check. Gee, thanks, guys. You think I'm going to fall for that again? They mentioned paying the bank fees, but what about the rent check and heaven knows what else? Yes, my lawyer etc has been called.

I hate being poor. So I just finished listing a whole bunch of stuff for sale on Craigslist, made some calls to my clients begging for extra work right away (writing for web sites), and begged my friends to lend me some cash. And bought a lottery ticket.

I'll be better soon - have some checks coming in soon - but gotta get that rent in NOW.

(insert screaming noises here)

send good vibes gang, I need them.

 

[Raduque]

What a shitfuck of an insurance company. Did you get a reason why they canceled the check?

Also, this is why I cash checks instead of deposit them. The money can't be taken away if it's physically in your hand. I'll gladly pay the 1-3% or whatever to have that piece of mind.

 

[Eli]

What a shitfuck of an insurance company. Did you get a reason why they canceled the check?

Also, this is why I cash checks instead of deposit them. The money can't be taken away if it's physically in your hand. I'll gladly pay the 1-3% or whatever to have that piece of mind.

If you cash a check at your bank, it is still associated with your account. You can bet your ass they will happily deduct the money from your account. If that sends you into a negative balance, that is fine by them.

I am not sure what happens in the case of the check cashing places. I assume it requires identification, so they have enough of your shit on file to demand repayment.

 

[tk149]

Something about this story doesn't add up.

If the OP's facts are correct her bank has seriously breached stop payment and check clearing rules. She should contact state bank regulators and file a complaint immediately.
I suspect there is more to the story than is being told.

Agreed. The regulations regarding banks and check clearing are very strict. Even though times are longer for out-of-district (Federal Reserve) check clearing, two months is way too long, assuming that the check is from a domestic insurance company. If it was an international check, then yeah, it could take a lot longer.

I worked in deposit operations at a bank, and I think the longest we were able to delay a check was around two weeks, and that took a bit of fiddling and stretching the rules.

 

[tk149]

Considering the current IT technology available to banks, this is something that should be legislated away. That's just a bullshit scam.

Check 21 is optional.

 

[Anonemous]

It's pretty funny that you guys are saying the banks would not scrutinize the checks. I know the banks don't check or verify the checks/MO authenticity but I actually had a Bank Specialist tell me otherwise.

The bank specialist assured me to my face, don't worry the bank will actually make sure your deposit goes into your account if it has your name on it. I called BS on him telling him that I already endorsed the back of the check and that anybody would've been able to cash it. He countered that this would NEVER happen.

 

[Raduque]

I am not sure what happens in the case of the check cashing places. I assume it requires identification, so they have enough of your shit on file to demand repayment.

That's why I specifically mentioned a check cashing place (with the 1-3% comment). What can they do, send me a nasty gram and threaten a CA?

 

[gaidensensei]

Some of you dudes went too into semantics behind check bouncing and the OP probably doesn't care for that anymore at this point. I know I'd be pretty flabbergasted and be doing anything to remedy the issue should I be in that situation right now. Maybe not so much a lotto ticket, but I can see the reasoning for doing that.

I guess the moral of the thread is to keep some extra money lingering around for emergency situations at all times.