What can we NOT tell a caller when asking to verify funds? Can we tell them that an account is closed? Can we verify that it is an open and active account? Are we simply supposed to verify whether funds will clear?

It has always been my belief that we can tell a caller that an account is open or closed. Am I incorrect?

I was always under the impression that you could confirm the check would/would not clear at this time. That was all. That was part of the clearing process and there was no need to volunteer additional info.

GLBA Privacy does not restrict your ability to verify if funds are available in an account. Section 14 allows you to share information necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes.

If the customer wrote a check to someone, he has authorized a transaction.

What you have to be careful of are:
1. You should have procedures to determine if the caller is legitimate.
2. You should NEVER say the check will clear. You don't know that because other items might come in before that particular check does. You can indicate that the account has sufficient funds at that particular time for the check in question.
3. Do not volunteer more information than is requested.

Finally, I do not see an issue with telling someone that the account is closed if someone is calling to verify a check.

My biggest pet peeve in all of this Privacy stuff is - Privacy was NEVER intended to help people commit fraud. IMHO - If someone has written a check on a closed account, they have committed fraud and the receiver of that check is entitled to know the check will not clear.

I've looked for these limitations under RFPA and wasn't able to find where it was addressed. Is this addressed or is this open to interpretation?

Thank you, Andy and Bonnie. With what you've offered and what we've found, I believe we've got what we need to go back and make sure our policies are sound.

Thanks again!! You guys are wonderful!