saw the thread about bad checks and i had a customer recently that was transferred to me with an interesting situation (why i don't know) but apparently if you have a check returned the company can turn around take your routing number and check number off your check and electronically debit your account their NSF charge - AND ITS LEGAL! for instance, you write a check for $20 and gets returned. your bank charges you $29 NSF, the company resubmits and it goes through plus a second ELECTRONIC debit for THEIR fee of say $29. even though the check went through the second time. when i heard about this i called USBank where I bank now and asked them about it (just curious) and they said they don't check to see if whoever is debiting the account has permission to do so and they don't have to. makes me kind of nervous in this day and age of technology that anyone could drain your bank account and banks don't seem to care. so beware!
It's only legal if you agree to it. Must sign disclosures, etc. Do a google search on ACH/RCk for the info. There was a just a ruling in the 11th circuit that said even though a sign was posted about the electronic drafting, it did not mean the customer read it and the CA lost. You can stop it by having your bank disable the ACH feature on your account.
You have the right to contest any ACH through the FCBA (or equivelant) (look at the notice on the back of your check account statement).
unfortunately all it takes is a notice posted at the merchant or a disclosure on your billing for authorization - you don't have to sign a disclosure, the sig on your check (or debit slip) is all they need. i went round and round with both my employer and where i bank and while you can dispute it, most times you will lose. just fair warning.
It may take a lawsuit, but the some courts have ruled that just because a notice is displayed, it is not good enough. Plus read the RCK rules. It will tell you how to get out of it. If your bank won't budge, file a complaint with the Office of the Comptroller of Currency, that will wake them up.
NEWS RELEASE CONTACTS: NACHA Michael Herd (media only) mherd@nacha.org Deborah Shaw, AAP dshaw@nacha.org NACHA Requires Lockbox Conversion Opt-Out Herndon, Virginia, March 1, 2004 â?? The voting members of NACHA â?? The Electronic Payments Association have approved an amendment to the Accounts Receivable (ARC) Entry rules that requires companies that originate ARC payments to provide consumers with the ability to choose not to have their checks converted to automated clearing house (ACH) debits. The provision becomes effective on June 11, 2004. The new rule will likely have little practical effect. A NACHA survey found that 93 percent of companies that originate ARC payments already provide the ability to opt-out. In many cases, less than 1 percent of consumers are electing to opt-out. â??Consumer acceptance of check conversion has been extremely high,â? said Elliott C. McEntee, President and Chief Executive Officer of NACHA. â??NACHAâ??s new rule ensures that the small percentage of consumers who prefer not to have their checks converted will be accommodated.â? Consumers who opt-out of check conversion may still experience electronic check processing. Beginning on October 28, 2004, all checks become eligible to be processed electronically under the framework established by the Check Clearing for the 21st Century Act. The ARC application became effective on March 15, 2002, and allows checks delivered to remittance and lockbox locations to be converted into ACH debits. NACHA estimates that in 2003, there were 220 million ARC payments, including on-us payments. ARC is used almost entirely for consumer bill payments such as credit cards, mortgages, insurance, and telecommunications. About NACHA - The Electronic Payments Association NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT). Visit NACHA on the Internet at www.nacha.org.
May 15, 2001 TO: NACHA Family FROM: Cari Conahan, AAP Director, Network Services RE: Operations Bulletin ACTION REQUESTED: Attached for your information are two Operations Bulletins highlighting important information relating to the following rules issues: (1) authorization requirements for the collection, via the ACH Network, of fees relating to checks or RCK entries that have been returned for insufficient funds, and (2) proper formatting of the Check Serial Number Field for POP and RCK entries. If you have any questions concerning the attached Operations Bulletins, please donâ??t hesitate to contact the Network Services Department at (703) 561-1100. OPERATIONS BULLETIN AUTHORIZATION REQUIREMENTS FOR COLLECTION FEES RELATED TO RETURNED CHECKS OR RCK ENTRIES Originators of RCK entries that desire to use the ACH Network to collect a fee associated with a check or ACH entry returned for insufficient funds must understand that they are required by the NACHA Operating Rules to obtain the consumerâ??s written authorization prior to originating a debit entry to the consumerâ??s account. The recently-revised Official Staff Commentary to Regulation E clears up any confusion relating to the law governing any fee assessed against a consumerâ??s account as a result of insufficient funds. The revisions clarify that this type of transaction is a separate and distinct transaction from the RCK entry and that such transaction is governed by Regulation E. This clarification is consistent with the position that NACHA has taken on this issue. Regulation E also clarifies that, for purposes of the Regulation, a written authorization is not necessary for one-time EFTs. According to the Commentary, notice is all that is required for authorization. It is important to note that this is not a new position. Regulation E has never required the consumerâ??s written authorization for a one-time EFT. The written authorization requirements of Regulation E apply only to pre-authorized recurring EFTs. The NACHA Operating Rules do, however, require a written authorization for most one-time ACH debit entries, including collection fees. The NACHA Operating Rules were amended nearly ten years ago to add this requirement in an effort to reduce fraud over the Network. The Federal Reserve Board is aware of this requirement within the NACHA Operating Rules and, in fact, references it in the Official Staff Commentary. ODFIs and their Originators should be aware that issues relating to the transmission of unauthorized entries may be submitted under the National System of Fines and may subject the ODFI and its Originator to the potential for fines. * * * * * If you have any questions concerning this Operations Bulletin, please contact NACHA or your ACH payment association. OPERATIONS BULLETIN FORMATTING OF THE CHECK SERIAL NUMBER FIELD FOR RCK AND POP ENTRIES Originators and ODFIs of RCK and POP entries should examine their ACH origination software to ensure that it is set up to format the Check Serial Number Field correctly for these transactions. A growing number of errors in the formatting of the Check Serial Number field by Originators and ODFIs is resulting in processing problems for RDFIs receiving RCK and POP entries and for consumers receiving their monthly bank account statements. Many software packages currently used by RDFIs will reject an RCK or POP entry if non-numeric characters are present within the Check Serial Number Field, resulting in the need for manual processing of these transactions by RDFIs. RDFIs are also experiencing difficulties in identifying the check serial number for inclusion on the consumerâ??s statement when the placement and format of the information provided varies. Similarly, the ability of the consumer to understand information on his monthly bank account statement may also be compromised when check serial numbers are not presented on the statement in a consistent manner or when additional information is included, making account reconciliation difficult. The NACHA Operating Rules define only the specific contents that are permitted within a particular field. The Rules do not define information that may not be included. Originators and ODFIs must understand that they may not use extra space within a particular field to include any information outside the defined contents. The NACHA Operating Rules permit Originators to place only the check serial number within the Check Serial Number Field of the RCK and POP Entry Detail Records. The word â??check,â? abbreviations such as â??ckâ? or â??chk,â? or other merchant codes must not be included within the field. Because the Check Serial Number Field is defined as an alphanumeric one, the NACHA Operating Rules require information within this field to be left justified and space filled. The serial number of the check must begin in the leftmost position of the Check Serial Number Field, and any unused spaces within the field must be left blank. The following example illustrates the correct way to format the Check Serial Number field for a check containing serial number â??1234â?. Several examples of incorrect formatting of this field are also provided below. CORRECT 1234 INCORRECT 0001234 000000000001234 CK# 001234 CK1234 1234 6532986002 CK1234 48832817 ODFIs and their Originators should be aware that issues relating to formatting problems may be submitted under the National System of Fines and may subject the ODFI and its Originator to the potential for fines. * * * * * If you have any questions concerning this Operations Bulletin, please contact NACHA or your regional ACH association.
I don't have the links anymore, but to ACH an NSF check, you must sign an authorization on the check, your check signature is not enough. BTW - I received a settlement for $1500 for a 7.88 NSF check when a CA tried this crap with me.
Re: Re: little tidbit i thought of sharing It was I who posted about the checks. I got my first dunning letter from the company who is trying to collect them. I believe they are about 3-4 years old. First communications that I got from them...heck, I'm not even sure if they are mine. I've got a VL ready to send to them tomorrow. I'm a little curious about your situation. How did you wind up getting a $1,500 settlement?
Re: Re: Re: little tidbit i thought of sharing Here's the whole saga - played out on Cnet http://consumers.creditnet.com/stra...51319&perpage=20&highlight=efund&pagenumber=2 Jenz, there are links in there I used in my research...they are the ones I referred to earlier.
Re: Re: Re: little tidbit i thought of sharing holy information jlynn...too much to process in one sitting. so basically what you found out was that in order for them to do that, they need a seperate signed authorization - am i correct? BTW, this nice lady that reached me in error (and who i am assisting on the sly) one of these transactions were an electronic check (meaning they take your check, slide it through a machine and give your check back to you) at a local merchant. i went to that local merchant today and got a copy of the slip you sign (and remember, they claim that as long as you are notified - and in this case she talked to the CA and they said it is on the slip)...here is what it reads "I authorize conversion of my check to draft or EFT and the debiting of my account for payment of the sale amount. I expressly confirm that I have seen and read the return check fee point of sale signage. If the draft or EFT returns unpaid I agree to pay my ceck plus all applicable fees as stated on POS signage or the maximum fee allowed by state law by EFT or debit to my account." There is no signage relating to POS (or checks at all), secondly the charge did go through the second time. Is it legal to charge NSF fee on something that did get paid? LOL! the funny part is that on this transaction I guess the CA is Telecheck!
Re: Re: Re: Re: little tidbit i thought of sharing Separate in that they cannot rely on your check signature. I had a merchant put a stamp on my check that had a place for my sig. BTW, this nice lady that reached me in error (and who i am assisting on the sly) one of these transactions were an electronic check (meaning they take your check, slide it through a machine and give your check back to you) at a local merchant. i went to that local merchant today and got a copy of the slip you sign (and remember, they claim that as long as you are notified - and in this case she talked to the CA and they said it is on the slip)...here is what it reads "I authorize conversion of my check to draft or EFT and the debiting of my account for payment of the sale amount. I expressly confirm that I have seen and read the return check fee point of sale signage. If the draft or EFT returns unpaid I agree to pay my ceck plus all applicable fees as stated on POS signage or the maximum fee allowed by state law by EFT or debit to my account." There is no signage relating to POS (or checks at all), secondly the charge did go through the second time. Is it legal to charge NSF fee on something that did get paid? LOL! the funny part is that on this transaction I guess the CA is Telecheck! [/B][/QUOTE] I believe it is legal to charge - it did bounce once. Thats why there are laws in place that only allow a certain amount of times you can present the check to attempt to collect it. Otherwise, people could get banged innumerable times Wow! Check your state's laws about what fee (if any) can be charged if there is no signage. The slip you quoted could be read to say if there is no signage then they will charge the legal max. Otherwise, the slip looks like a CYA slip, and the nice lady may just have to eat it.
Re: Re: Re: Re: little tidbit i thought of sharing thanks jlynn...the electronic check was just one of a couple. i'll keep you posted.
