Embarrasing, But I Gotta Tell Ya - CHECK IMAGES

TigerFan

I have learned a hard lesson. Please learn from this.

My business has struggled the last 12 months.

4 months ago I paid a sub via check on the same day I received funds from the homeowner. Told the sub do not deposit yet - it will take a couple days to clear and become "available" funds in my account.

Well, sub deposits the check ($5k) and it bounces. He calls, tells me check returned NSF, I say "no ****" and tell him I'll pay when the money clears in a few days. I ask for the check back and he says the bank does not return the check - it's just an electronic "image" of the check. I call his bank and verify, sure enough, check is shredded, they only send an "image" of the check.

3 days later, I go to his bank and make a $5k direct deposit to his account to cover the NSF check. Everything's cool - we keep working.

The sub and I part company at the beginning of Sept. Fast forward to last week. He goes to my bank and CASHES the check image!

Yes, a plain paper copy (image) of the original check is now considered LEGAL TENDER for the original shredded check.

I'm out $5k right now and fighting the bank to have it replaced, which I'm 80% sure I'll get done. Police report filed and expect him to be picked up in the next few days.

It is without a doubt outright fraud, but it has cost me days of work time to fight through the police / DA / Attorney / jurisdiction mess to get to where we can prosecute.

There's alot more to it, but bottom line is 1- sloppy work by the bank and 2) ignorance on my part of the fact that an "image" is actually casheable has cost me more than the $5k that I'm down right now.

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http://www.bayoucontracting.com

Chris Johnson

Lesson - Never write a check unless you have the money in your account

It is scarry someone can cash essentially a photo copy of a check. My wife used to sign my business checks before I had her signature added to the account, didn't really matter, they cleared them anyways, how's that for quality control?

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Chris

daArch

Check ???? What's a check ???

sorry, couldn't resist - with plastic and electronic funds transfers, who uses checks.

Can we all remember the days when checks were actually the safe way of payment ?

I'm beginning to think cash is now the safest.

thanks for the lesson. sorry to hear you got defrauded.

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Wallcovering Installations by Bill Archibald|paperhanger|Eastern Mass|Greater Boston Area|Dover|Wellesley|Franklin|Sharon|MA

Cole

Damn, I didn't even know that could happen!

Sorry to hear about the situation at hand.

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Tulsa's Leader in Outdoor Living Construction | Facebook | Tulsa Pergola Builder | Tulsa Outdoor Kitchens

TigerFan

I should add, to reduce the embarrassment, that my balance in the account was enough to cover the check, but my "available" balance was only about $3500.

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http://www.bayoucontracting.com

KentWhitten

I also didn't realize until lately that my bank cashes post dated checks. No...not mine! My parents have a tenant that likes to do that, make post dated checks. We cash 'em anyway.

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Custom Cabinetry - Portland, Cape Elizabeth, Scarborough, Kennebunkport, Yarmouth, Falmouth, Cumberland, Ogunquit, Maine

Salmon Falls Cabinetry

Grumpy

Thanks for the heads up, good to know!

bigchaz

must depend on bank. Bank of America sees me every couple days and they give me grief if someone makes a mistake writing the company name out.

I also cant cash checks to my business account.

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Charlie Soden
Apex DeckSavers
"New life for old wood"
Deck cleaning and staining Wake County

Floordude

For business accounts, Bank of America is the worst.

I'd shop around for a new banker, we did and it has been a blessing.

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Cole

I agree, BOA is the absolute worst bank to have to deal with.

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woodman42

I isn't just Bank of America.
Several times I have taken checks issued to my company to the issuing bank and they wouldn't cash it.
I even took one to my bank (Chase) to deposit it with less cash on it and they wouldn't do it either. Had to deposit then make seperate withdrawl.
Go figure.
No I never issue a check without having the funds to issue. I simply tell them I will give them a check in a week, which is still less than 30 days.
But I usually try to keep enough cushion in that account to have enough to pay subs right away.

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Did you say tool sale?

HemiMan2500HD

it says right on the paper that they send you that the image is just as good as having the original check. You really have to be careful with those

shed-n-deck

Yeah, that's tough....I hope that you recover the $5K. I couldn't fathom having that much money taken from me. I don't deal with checks much, if a HO gives me a check, I'll take it to their bank and cash it, and then put the cash into my account, that way there is less wait to find out if the check is even going to clear. That only works for smaller amount checks, less than $1000 usually. Thanks for the tip.

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Shed

GregS

It used to be that a napkin would be consider as a legal method of funds transfer between two parties providing that there is: 1) a name of who the money goes to, 2) an amount both numerical and written, 3) bank/branch number, 4) account number, 5) Signature

daArch

I could be wrong (not the first time, nor the last), but I believe that a check written TO a company is treated differently at the issuing bank than one to a person.

As we all know there is a lot of fraud with checks being cashed, so I am not surprised that a bank wants a check deposited to an account at thier bank instead of redemed for cash.

And as you have all probably heard, there is an organized "gang" who is able to make countfeit checks from comapnies and then cash them. These people have hit the southwest and recently the northeast. I am sure banks are making that practice harder - and the honest hardworking stiffs are the ones that are most affected.

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Wallcovering Installations by Bill Archibald|paperhanger|Eastern Mass|Greater Boston Area|Dover|Wellesley|Franklin|Sharon|MA

wackman

Years ago a company tried to steal money from me through those "check by phone" systems.

You give them all your checks numbers and they generate a check of their own and deposit it. I bought something that way, and after that every month or so they tried doing it again but I wasn't buying anything else and they started making it for absurd amounts. I originally bought a $500 item but they started generating checks for $2500.

My bank said it's perfectly legal and there was no way to stop them from doing it over and over, so my only recourse was opening a new account with different numbers and changing all my bill pays, automatic withdrawls, etc...

Pain in the ass.

They just kept claiming it was an accident and that it was fixed but after 4 bogus check attempts I just cancelled the account.

TigerFan

It's called the Check 21 system... here's all the info.

http://www.federalreserve.gov/paymen...tion/faqs2.htm

The print on the image does say it's legal tender -- I think the problem, for me at least, lies in the EASY duplicability of this type of payment tender. I'm stunned this is actually real and legal.

Anyway, I meet with the bank tomorrow. Bottom line is, we warned about "checks" coming through and the bank handled the transaction sloppily. It helps that we had another incident or two with my bank in the past, clearly their fault and they made good on it then, but that helps bolster the case that they need to own up their shortcomings and make me whole. We shall see.

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http://www.bayoucontracting.com

Chris Johnson

TigerFan, # 23 in that list applies to you. You should be receiving a full credit towards your account and some form of ass kissing if this is the third time the bank has messed you up

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Chris

Frankawitz

TigerFan, Sorry to hear you got the run around, I had The Yellow Book USA stick it to me years ago, I had signed a proposal for placing ads in their phone books, I had to give the sales Rep a deposit check in good faith $90.00. No problem, well about 3 months go by and I was checking my account when I noticed three withdrawals for $150.00 each I talked with the bank and asked for was going on and they said that they were checks and the bank honored them and cashed them, so when my statement came I checked out the checks well they were made out to Yellow Book USA Inc. They had takin my routing number and account number off the deposit check I had given the Rep and they made up three different company names and run them thur my account, I asked if this was Legal and the Bank told me yes and there's nothing that can be done since they had the routing number and account number, So guys don't let a shady person get a hold of those numbers or you can be cleaned out and there nothing you can do. Then I get a call from Yellow Book USA collections wanting the balance I owed for the phone book ads, well I hold them after what they pulled they could kiss my azz I wasn't giving them a dime. The kicker is they have printed an ad for my company in their books for the past 4 years now, I still aint gonna pay them. Yellow Book USA is nothing more then a Rip off company.

wackman

Watch it, I know a guy who had a similar situation and they eventually screwed up his credit while he fought them. Says now that he wishes he'd just paid the money to make it go away and save his credit.