We have recently experienced a loss on a foreign check that proved to be counterfeit. We do not currently have a policy on handling foreign checks but are looking into one now. Does anyone have any words of wisdom or ideas that they use when it comes to foreign checks and holds?

Send them all for collection only unless you are dealing with one of your best customers and you know they are (1) going to be good for it, and (2) are going to be a customer of yours for several more years.

We had the same situation. A large check drawn on a bank in Vancouver, BC was returned after a month and a half from the deposit date. We will send for collection next time. The account should not have been opened to begin with: customer was out of market area, no beacon score, claimed to be in internet business. What was your circumstance?

Randy makes an excellent point. You should also know that foreign banks are not subject to Reg CC, and an pretty much dishonor and return a check whenever they feel like it.

Since foreign banks are not subject to Reg CC, if you receive a cashier's check drawn on a foreign bank and you decide to accept it, couldn't you put a hold on it? As long as the bank was consistent in handling wouldn't that be ok? Maybe use the 11 day hold for non-local? Our bank only accepts foreign check deposits from established customers. If it was a new customer, we would probably not accept it.

As the item is not subject to Regulation CC, you could put a hold on for any period you choose. It would not even be necessary to be consistent from one situation to the next. However, there is no time frame in which you would be assured that a hold would be long enough.

Sending the item for collection translates to the most equitable treatment of the customer available; i.e. when you get the money, they get the money.

Making payments by foreign check is at best a cumbersome process. As noted above, it is fraught with uncertainty and delay. Sending foreign checks for collection is, as Ken says, the optimal solution for the bank (and, I agree, for its customer). However, it would be a lot less cumbersome for your customer and for the remitter if the payment could be made by wire transfer.

That may not be reasonable for smaller payments, due to the costs involved. But sending a check for collection isn't "cheap" either, with all banks involved usually getting a fee for the service.