Click to return to BOL home page



April 22
A Banker's Guide to Virtual Currency
Andrew Beal

April 24
BSA/AML Compliance: Writing the SAR Narrative
Ken Golliher

April 29
HSA Basics
Whitney Johnson

April 29
Required Training for Loan Originators
Mary Beth Guard and Jack Holzknecht

May 13
Overdraft Practices in Today's Regulatory Environment
John Burnett

May 14
Reg E Claims - Allocating Liability Correctly
Andy Zavoina



Topic Options
Manage Topic
#297035 - 01/03/05 01:49 PM Check acceptance: Legal line or Courtesy box
SwankyFrank Offline
100 Club

Registered: 10/15/04
Posts: 146
Loc: Earth
We are struggling with this subject yet again. We process in excess of 7 million checks a month, and frequently encounter checks where the legal line and courtesy box is different.
Our dilema is, that when processing these checks, we can often see from the source document what the customer intended, but there are cases when we still screw it up. either from the customers point of view, or the paying bank.

Currently we are taking the checks strictly for what is written on the legal line (UCC.3.114). While we don't get any returns from Paying banks anymore, we still get customer complaints.

It is really amazing to me how many people out there just don't know how to write a check.

How do you handle these at your bank?

Top
General Discussion
#297036 - 01/03/05 03:17 PM Re: Check acceptance: Legal line or Courtesy box
Coffee Roaster Offline
100 Club

Registered: 12/12/02
Posts: 134
Loc: Southeast Michigan
Quote:

Our dilema is, that when processing these checks, we can often see from the source document what the customer intended, but there are cases when we still screw it up. either from the customers point of view, or the paying bank.

Currently we are taking the checks strictly for what is written on the legal line (UCC.3.114). While we don't get any returns from Paying banks anymore, we still get customer complaints.





While you are technically correct in taking the legal amount you have to weigh in the customer service aspect as well. (You can lose customers - not Paying banks!) While it is true banks can return checks that are written for the courtesy amount they will typically only do so when the check is brought to their attention (ie NSF, Customer complaint, high dollar, etc.) We have found taking the check for what the customer intended (up to a certain dollar amount) results in fewer complaints as customers are not being charged late fees and incurring additional interest because their $100.25 was taken for the legal amount of $100.00. It is important to note that if we use the courtesy amount from the check the courtesy amount must match a dollar amount from the coupon (ie: full, minimum, or customer written)

Top
#297037 - 01/04/05 09:47 AM Re: Check acceptance: Legal line or Courtesy box
SwankyFrank Offline
100 Club

Registered: 10/15/04
Posts: 146
Loc: Earth
Firefighter: Thanks for the reply. We are not concerned with discrepancies under $1. I would say that for "cents" errors, 99.99% go through without being noticed by either the customer or the bank. Our concern is more with real dollar differences. For example the courtesy box says $200. but the legal line says "two and........xx/00" but the customers source document indicated that they wanted to pay the $200. We take the legal line, but irritate the customer.

These are always the drawers fault, but it would either be us or the paying bank that gets made out to be the bad guy.

Top
#297038 - 01/04/05 02:07 PM Re: Check acceptance: Legal line or Courtesy box
HappyGilmore Online
10K Club

Registered: 06/11/04
Posts: 17234
Loc: Moron, Mongolia
For example the courtesy box says $200. but the legal line says "two and........xx/00" but the customers source document indicated that they wanted to pay the $200. We take the legal line, but irritate the customer

Interesting that the customer would be mad at you. Maybe you can start charging them a "mindreading" fee. I think this falls under the "damned if you do damned if you don't" rule.
_________________________
When life gives you lemons...squirt the juice in your tormentors eyes...that stuff burns!

Top
#297039 - 01/04/05 03:02 PM Re: Check acceptance: Legal line or Courtesy box
Coffee Roaster Offline
100 Club

Registered: 12/12/02
Posts: 134
Loc: Southeast Michigan
Quote:

...Our concern is more with real dollar differences. For example the courtesy box says $200. but the legal line says "two and........xx/00" but the customers source document indicated that they wanted to pay the $200. 0




I would irritate the customer too on "real" dollar items. Not only is it the legal thing to do but what would happen if the loan pays off and the customer then goes to the Paying bank to request an encoding error adjustment. It just opens up another can of worms for you to address (besides causing additional work for your Adjustment area).

Top