BOING: Watch for Rubber Checks!

Checks: No days of delay anymore

Checks: No days of delay anymore

The Atlanta Journal-Constitution
Published on: 10/28/04

The float just sank.

As of today, any check you write may be posted and the money deducted from your account within a few hours.

Savvy consumers no longer can count on a delay of a day or two or three the float as a paper check moves through the banking system.

The speedup is a result of the new Check 21 law, which goes into effect today. It allows banks to make an electronic image of a check and send the electrons, not the paper, through the system.

At the same time, the new federal law does not require banks to process your deposits by the new, speedy method.

Not all banks will make the switch overnight. Wachovia, for example, plans to start with a pilot program involving “a very limited set of customers,” bank officials said Wednesday.

Electronic processing is much cheaper than shipping tons of paper, so you can expect all major banks in Georgia to change over in coming weeks or months.

When you get your statement in the mail, you can expect a mixture of traditional paper checks and electronic images of other checks.

Consumer advocates offer these tips for dealing with speed-of-light banking:

Stop writing rubber checks. Gail Hillebrand, a senior attorney for Consumers Union, suggests you check your balance if you have any doubt at all about how much is there. If you bank online, you can look up your balance from a computer.

Use direct deposit whenever possible. Many employers will arrange to send your pay directly to your bank account. You can do the same thing with dividend checks and government checks. With direct deposit, there is no hold, bankers say.

Consider overdraft protection. Some banks will allow you to link a savings account to your checking account. If you write a bouncer, your bank will cover it with money from the savings account. Note: Banks generally charge for this or similar arrangements.

Check your monthly statements as soon as you receive them. Some experts worry that, on occasion, a check might be posted twice. To get the full protection of the law, you have to notify the bank about any such problems within specified periods.

Posted by loni on 10/28 at 09:24 AM in Blogging

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