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Posted by L on June 8, 2006, 4:57 pm
Please log in for more thread options >>> FYI
>>>
>>> I just ran into another aspect of the Check 21 regulations
>>> that were implemented after 9/11.
>>>
>>> Payees may now turn your payment check into an ACH debit.
>>> They then destroy your check; and it is never returned to your
>>> bank.
>>>
>>> Not only can this complicate proving you paid a bill (ACH
>>> debit records do not include the payee's name, though the
>>> bank can with some effort go back through their ACH logs);
>>> but this also messes up downloads since Quicken can't match
>>> the ACH debit with a check register entry.
>>>
>>> Nothing to be done about this. I just wanted to let others
>>> know about it.
>>>
>> Hmmm. That's not how I understood it. Nor does it match my experience.
>> There are several vendors in my area that use ACH check conversion. It is
>> done at point of sale. The physical check I write is scanned, and the
>> check is not destroyed, but it is returned to me.
>>
>> That is very different than Check 21, which as you stated was enacted in
>> part because of the events of September 11th, 2001, in order to
>> facilitate the processing of checks without needing an actual paper copy.
>>
>> I googled a bank website and found these explanations:
>>
>> " What is Check 21?
>> The Check Clearing for the 21st Century Act, better known as Check 21, is
>> a new federal law that went into effect on October 28, 2004. Check 21
>> establishes what is known as a "substitute check". A substitute check is
>> a paper reproduction of an original check that contains an image of the
>> front and back of the original check, is suitable for automated
>> processing in the same manner as the original check, and meets other
>> technical requirements. A substitute check has the same legal standing as
>> the original check and can be processed just like the original check. "
>>
>> " How does Check 21 differ from ACH Check Conversion?
>> Electronic check conversion (or e-check) is the process of converting a
>> physical consumer check (at the point-of-sale, for example) to an ACH or
>> other electronic transaction. Typically, the retailer takes your check
>> and scans it for the encoded financial information after obtaining your
>> authorization. The check is then stamped "void" and returned to you.
>> Check 21 involves creating digital images of original checks, but they
>> are processed under the same laws and regulations as paper checks."
>>
>> So, although an ACH withdrawal processes electronically, and a bank is
>> allowed to create an electronic 'substitute check' and destroy the one
>> you wrote, the only similarity is that the process is electronic. The
>> "substitute check" is not an ACH withdrawal. And an ACH withdrawal can be
>> made with or without a physical check (either by prior authorization via
>> phone/fax/online or at point-of-sale via physical check).
>>
>> Check your bank statement. Most likely you will find that "On your
>> monthly statement, a substitute check will be listed with your other
>> checks; an e-check will be listed with other electronic funds transfers,
>> such as automated debits for health club memberships or a payment with a
>> utility company. "
>
> You may well be right that ACH conversion is not part of Check 21.
> I was going on the basis of what I was told by my bank representative.
>
> Regardless, my ACH conversion was done for a mortgage payment.
> So I guess that the "point of sale" would be the mortgage servicing
> compay in Baltimore. And they definately have destroyed my original
> check are not planning to return it to me.
>
> Haven't seen a monthly statement yet (I'm just going by the online
> transactions) but I'm quite sure that the ACH conversion will, as
> you say, look like other electronic debits. Hence the problem
> matching to transactions that that originated as checks.
>
I, too, would be concerned with a billing agent being able to convert a
paper check into an electronic format without my permission, and without any
copy of my physical check. I would be especially concerned if it were a
mortgage check, or any other check where there might be a memo attached (ie.
"extra principal payment" on a mortgage or "payment in full less disputed
charge - see attached" on a credit card.)
I was unaware that such a conversion could be done without the express
permission of the consumer.
Wait till you get your bank statement, tho. According the the information I
googled, you are entitled to a copy of the image of your check. See if the
bank gives it to you.
As to matching with Quicken, yeah, it will be a pain. Quicken will not
automatically match without the download containing the check number. You
will most likely have to match manually.
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