I'm not an expert in some of the more technical issues of negotiable instruments, but it seems to me that the customer should be able to recover the money. Otherwise, who's enjoying the use of these funds?
It's scenario's such as this that will spell disaster for OnLine Bill Pay that is set up in this matter. Too many things can go wrong. If I were this customer, I would be steaming mad if the money was sucked out of my account, not applied to the bill I was paying, and then I couldn't get it back.
I know more and more people are using "Reverse Bill Pay" where you go to the Payee's sight and initiate a Bill Pay from their site directly out of your bank account. The money gets credited right away, and no more of these silly "Orphan checks" floating around the ether.
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'