Quicker check clearing turnaround that was supposed to go in effect next year.

[CPA]

I thought the new process that posted checks against your account in 24 hours was supposed to take effect at the beginning of the year, but I had 4 checks that were mailed out last Friday already post against my account. Damn, that was quick.

 

[Mr N8]

From our electronic banking officer, here at work:

YOUR FLOATING CHECK JUST SPRUNG A LEAK
Beginning in October, new legislation becomes effective which eventually may put an end to ?floating? checks. At one time or another, almost all of us have probably ?floated? a check. Perhaps it was close to the end of the month and you bought groceries at Piggly Wiggly on Friday, knowing that the check you wrote couldn?t get back to your bank before payday on Monday.

While more of us are using debit cards to pay for purchases, many consumers still rely on paper checks taking 2-3 days to clear their banks.

After October 28, you may find this more difficult. That is when Check 21 becomes effective. The primary purpose of Check 21 is to provide an alternative to our nation?s reliance on processing paper checks. You will still be able to write a check, but once it leaves your checkbook, the banking system will handle it differently. Should our nation experience another tragedy like 9/11, our dependence on moving paper checks could result in serious consequences for our national financial system. This situation was the impetus for the adoption of Check 21.

Another reason for Check 21 is to stifle white-collar criminals who write checks on a regular basis knowing that they have insufficient funds to cover the transaction.

Currently, it takes 1-5 days from the time you write a check to a retailer to the time the check reaches your bank account for payment. With Check 21, you will write a check to the retailer and the check?s image is then transmitted electronically through the system. If your bank is set up to receive electronic images, the transaction reaches your bank account for payment on the same day. If your bank is not set up with electronic imaging, it
could take a day for the money to be deducted from your account.

Rather than using paper checks, the new law would permit financial institutions to use ?substitute checks??a digital image of the original paper checks with all of the information contained on the original check. The ?substitute check? would be required to contain the words, ?This is a legal copy of your check. You can use it the same way you would use an original check.?

Although it will take several years for most Wisconsin banks to move to paperless transactions, you can eventually expect to see the end of ?float? periods as well as the end of returned paper checks in your bank statement. Rather, you?ll receive replicas or images of the original checks, or those payments may appear as electronic withdrawals on your bank statement.

While electronic presentment is not mandated for financial institutions, it may prove beneficial not only to the bank, but to its customers. Currently, it can take up to five days to access funds on check originating outside of Wisconsin. Under Check 21, bank customers will be able to access these funds more quickly.

All banks must have things in place to do this by October, but it is to the larger banks advantage to get in on this early, because it eliminates a lot of the courier fees that they pay, and places them onto smaller banks, so you will be seeing this happening a lot quicker than you would think.

 

[RossMAN]

My corporate bank also received this notification (a while ago though).

This is going to piss off a lot of customers. You shouldn't write checks unless you have sufficient funds to cover the debit, end of story.

 

[CPA]

ahhh, this may also explain why checks we deposited for our business no longer have the 10 day wait period. We found this out last week.

Just got to be more careful in the timing now.

 

[kranky]

I'm not looking forward to the problems associated with Check 21. You no longer have the right to access your original check, only a printout of the digitized image of the front and back. So if you wrote a check for $5.00 and someone altered it to say $500.00, good luck proving the check was altered. The images wouldn't have been made until after the alteration anyway. In fact, your bank doesn't even get your checks back. They are in the custody of the bank of the payee, and that bank can make up their own rules about retaining the paper copies.

You do have the right to request a paper copy of the image (called "substitute checks" in Check 21) and these substitute checks have to carry specific wording including "This is a legal copy of your check". But some banks have had customers sign an agreement to accept "voluntary truncation" which provides copies of checks that do not meet the criteria for "substitute checks". These kinds of copies may not serve as proof of payment and do not trigger the recredit rights consumers have under Check 21.

And there will be problems where people "accidentally" submit the same electronic check multiple times.

Check 21 opens up many new doors for forgers and scam artists.

 

[ViRGE]

Originally posted by: kranky
I'm not looking forward to the problems associated with Check 21. You no longer have the right to access your original check, only a printout of the digitized image of the front and back. So if you wrote a check for $5.00 and someone altered it to say $500.00, good luck proving the check was altered. The images wouldn't have been made until after the alteration anyway. In fact, your bank doesn't even get your checks back. They are in the custody of the bank of the payee, and that bank can make up their own rules about retaining the paper copies.

You do have the right to request a paper copy of the image (called "substitute checks" in Check 21) and these substitute checks have to carry specific wording including "This is a legal copy of your check". But some banks have had customers sign an agreement to accept "voluntary truncation" which provides copies of checks that do not meet the criteria for "substitute checks". These kinds of copies may not serve as proof of payment and do not trigger the recredit rights consumers have under Check 21.

And there will be problems where people "accidentally" submit the same electronic check multiple times.

Check 21 opens up many new doors for forgers and scam artists.

All the more reason to just drop checks in favor of debit/credit cards. Checks are really only useful in P2P transactions these days.

 

[RossMAN]

Originally posted by: ViRGE

Originally posted by: kranky
I'm not looking forward to the problems associated with Check 21. You no longer have the right to access your original check, only a printout of the digitized image of the front and back. So if you wrote a check for $5.00 and someone altered it to say $500.00, good luck proving the check was altered. The images wouldn't have been made until after the alteration anyway. In fact, your bank doesn't even get your checks back. They are in the custody of the bank of the payee, and that bank can make up their own rules about retaining the paper copies.

You do have the right to request a paper copy of the image (called "substitute checks" in Check 21) and these substitute checks have to carry specific wording including "This is a legal copy of your check". But some banks have had customers sign an agreement to accept "voluntary truncation" which provides copies of checks that do not meet the criteria for "substitute checks". These kinds of copies may not serve as proof of payment and do not trigger the recredit rights consumers have under Check 21.

And there will be problems where people "accidentally" submit the same electronic check multiple times.

Check 21 opens up many new doors for forgers and scam artists.

All the more reason to just drop checks in favor of debit/credit cards. Checks are really only useful in P2P transactions these days.

Agreed.

I only write one check every month and that's for rent. I could use my bank's internet banking but in some ways I'm old fashioned.

For everything else I use my debit, credit or internet banking.

 

[Linflas]

Originally posted by: kranky
I'm not looking forward to the problems associated with Check 21. You no longer have the right to access your original check, only a printout of the digitized image of the front and back. So if you wrote a check for $5.00 and someone altered it to say $500.00, good luck proving the check was altered. The images wouldn't have been made until after the alteration anyway. In fact, your bank doesn't even get your checks back. They are in the custody of the bank of the payee, and that bank can make up their own rules about retaining the paper copies.

You do have the right to request a paper copy of the image (called "substitute checks" in Check 21) and these substitute checks have to carry specific wording including "This is a legal copy of your check". But some banks have had customers sign an agreement to accept "voluntary truncation" which provides copies of checks that do not meet the criteria for "substitute checks". These kinds of copies may not serve as proof of payment and do not trigger the recredit rights consumers have under Check 21.

And there will be problems where people "accidentally" submit the same electronic check multiple times.

Check 21 opens up many new doors for forgers and scam artists.

It kind of amazes me they are allowing these types of potential new areas of fraud to take place. Another scary thought is that all someone has to do is steal a utility payment out of your mailbox and they have all the information they need to do electronic checks off of your account. And for all you people that say to do it all online there are still quite a few primitive utilities that do not have online payment methods set up and I will be damned if I am going to pay a "convenience fee" just to pay my water bill.

 

[pyonir]

My bank has been doing this for a few months already. (Wells Fargo)

 

[dullard]

CPA: yep the deadline was never next year, but always this October. I'm not at all surprized banks are taking the transition gradually rather than trying the full transition right at the deadline.

RossMAN: yes it will piss of a lot of users. However what they were doing was illegal anyways, nice to see it now being enforced.

Kranky: that is why I just got duplicate checks. You have instant proof of what checks you wrote, and how much they are for. Just cost a buck or two more for the box of checks, and it is well worth the money.

ViRGE: small buisnesses just starting out still don't have the equipment nor the money to afford the 4%+ transaction fees with debit/credit cars. Checks will always be useful until there is a solution for starting businesses. Also what about graduation gifts, etc? Until every person has full, easy, and free access to these transactions checks are needed.

I see this as a step sideways instead of a step forward. There are good things and very bad things in the law.