There is concern, which I'm in agreement with, here at our bank about disclosing our customer's account number on the back of a check they may be depositing into their account. It has been common for customers to endorse the checks (some businesses even have old endorsement stamps with the number) and put for deposit only and the account number of the account they are depositing into but with all the ID theft and fraud as well as customer privacy this doesn't seem to be a good practice. Not having an account number on the back of the check makes it very difficult for operations to know what account to charge back if the check is returned, especially if the customer has more than one account which is common for
commercial customers. We're working on and have already made some processing changes but haven't decided the best way or if we've covered all the bases.How are other banks handling this now? Suggestions are appreciated.

I can't agree that it's an issue or, if it is, that it is your responsibility to fix it. The payee's account number does not appear in the endorsement unless the payee places it there. Doing so may serve a purpose for the payees; e.g. they may have more than one depository account and different types of payments are to be deposited to different accounts. If you feel it's an issue, you may bring it to your customers' attention and leave it at that.

Your customers make their account number known to everyone to whom they issue a check. They may not have any significant concern over the fact that they also disclose it to everyone who writes a check to them. They may also understand that fewer and fewer checks are actually returned to the issuer. Most of the checks they deposit will not actually be returned to the drawers. Their customers will receive only images of their original checks and generally those images only include the front of the check, not the back of the check that may include an endorsement with the payee's account number.

Even in cases in which the customer doesn't apply an account number in the indorsement, many banks print that account number on the back of checks as they process them, to assist in charging back items. Other banks are able to use processing sequence numbers applied to the back of checks to do very quick lookups, because they have technology that permits it. In those cases, the account number of the depositor isn't needed by the bank.

When our tellers cash a check for a transit check for a customer we input the customers account number in our system, which helps us aggregate that customers daily cash in/out and, therefore, helps us determine whether a CTR should be file. As a result the customer's account number is posted on the back of the transit item by the teller machine. We have had many customers complain about the security of their information due to their account number being returned to the check issuer. Should we discontinue this practice since we, the bank, are doing it rather than the depositor as stated in ledfoot's scenario?

Whether you continue or discontinue the practice is strictly a management call -- whether to respond to the small percentage of customers who have been vocal about the practice (and, trust me, it is a vocal minority!) If you can find a way to accomplish your goal of aggregating cashed checks without printing the account number on the back of the cashed transit checks, you can consider whether you need to continue printing the number.

I'm adding this excerpt from Interagency Guidance promulgated by all of the functional federal agencies regarding Regulation P and its sister regulations merely to round out the thread:

I.3. Q. I offer consumer checking accounts. I notify my customers that, among other things, I make disclosures as permitted by law. My checking account customers deposit checks made payable to my customer but drawn on a financial institution unaffiliated with me. My practice is to write my customer's account number on the back of the deposited check to facilitate its processing. The check itself then goes to the maker's financial institution, with my customer's account number on the check. Is this a disclosure of nonpublic personal information that would be subject to opt out requirements or the prohibition against sharing account numbers?

A. No. The opt out provisions do not apply to disclosures in connection with servicing or processing a financial product or service that a consumer requests or authorizes. Nor do they apply to disclosures that are required, or are a usual, appropriate, or acceptable method in connection with settling, processing, clearing, transferring, reconciling or collecting amounts charged, debited or otherwise paid. §§ 332.14(a), 332.14(b)(2)(vi)(A). Also, because the account number is added to the check solely for use in processing the check and is not used in connection with marketing by a third party, this disclosure is not prohibited by the ban on disclosing account numbers for marketing purposes. § 332.12.

I'm not suggesting that the GLBA privacy regulations dispose of the issue because they do not. All they add is insight. The wisdom inherent in the bank adding the depositor's account number remains a judgment call, but it is clear that the bank adding the number should have more than a casual need for its presence and that a trace number is far preferable.

There are other threads that discuss writing the payee's social security number to the back of the check. That is not what is being discussed here. I think that practice is plainly irresponsible.