The first time I heard that someone used a check at Wal-Mart and received their canceled check back immediately, I didn't believe I heard right. Then I saw it for myself and wondered "what are we coming to?" Then I found myself in a position of needing to pay a bill immediately. The time it would take for a credit card charge to clear or a check to reach the company would make the payment late and I would incur a penalty. The company representative told me they would be glad to take my check "electronically" over the phone. I couldn't believe it was happening as I read the ACH routing numbers, check number, and check amount over the phone. While I was still on the phone they verified that the check had gone through and my bank account had been debited even though neither a credit nor debit card had been used and the check had never left my desk. In fact, they told me to finish writing the check then write canceled all over it so I wouldn't use that check again.
We are talking about a process called check verification or e-check processing. And I have two reasons for bringing up this topic today. One is that as treasurer of the Friends of the Sacramento Public Library, I find myself needing to use the system as a customer and as a merchant. Two is that I'm finding some of the service providers less than outstanding in their service provided.
A couple of weeks ago a check I had written to Borders was presented there by our president to purchase several gift cards as prizes. Much to her embarrassment, the check was "declined" even though we had over $10,000 in that account and have never had a check rejected before. Neither the bank nor Borders admitted any responsibility, each pointing to the other as being at fault. I'm now convinced that the culprit was a middle man, the check verification company.
A couple of days ago I was asked to check into check verification as a way to simplify our receipt and deposit process of donations. A competitor to the bank we currently use promised they could simplify our handling of donations and (it turned out) the simplification was by using a check verification system. Both banks use a third part company to do that - very likely the same check verification system that had "declined" to accept and process our check. When I called the company our bank recommends to merchants, the human I was talking to said, "Sure we provide that service. Here, listen to this!" as he transferred me to a tape recorded message about check verification. At the end I think he was supposed to come back on the line but he never did. Nice way to lose a sale.
Other people are finding other problems. Some indicate that after their check's been "declined" they're being approached by the check verification company and told they should join a check guarantee program so their checks would never be "declined" again. Unlike the credit companies, these check verification services don't have to disclose why they've turned someone down. So they can be completely arbitrary and stonewall any questions.
Certegy is the company that works with our bank, Bank of America but it has one of the worst reputations out there. Their reputation is so bad they have to start their web site with a disclaimer that they're not doing any outcalling. They would be better off saying they don't have a check guarantee service.
Anyway, it looks like paper checks are becoming an extinct species, like the dial telephone. We'll still refer to the check but we won't really be using them. And I'm about to learn a whole lot more about e-checking,
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