Automatic Transfers - Voided Check Needed?

Currently, if a customer sets up an automatic transfer at one of our branches, he/she is required to provide a voided check as proof that the account at the other financial institution is in our client's name. Operations would like to automate this process, but cannot capture the voided check in an automated process. And, many times, customers don't have a voided check to provide, so automating makes sense. But, there's hesitation because of the risk that the client may be transferring to an account in someone else's name (example I was given was a mother setting up an auto transfer to her daughter's account). I pointed out that our online banking customers only need to provide the routing number and account number to establish auto transfers, but I still received pushback. Am I taking an oversimplified view of this?

Thanks.

Why do you care on authorized transfers that are out-going?

Currently, if a customer sets up an automatic transfer at one of our branches, he/she is required to provide a voided check as proof that the account at the other financial institution is in our client's name

that is a bank requirement, not a regulatory one, you can change as you see fit.

We do not require the customer to provide a check, just the routing number and the account number. I have not used checks in so long that I would have to search to find one or go to the bank and get a temporary, so I am sure there are a lot of customers like me.

Thank you!

You could do a prenote to assure that the account and routing number are valid which is all ACH Rules require. I'm not sure why the "to" account has to be in your client's name. We have clients paying their rent, making loan payments and sending money home to mom.

The only reason I can think of to provide a voided check is to confirm the accuracy of the routing and account numbers (this is usually a requirement when you are signing up for some type of auto payment out such as insurance when filling out manual forms).

strangely, I have only seen people ask for a voided check for a credit transaction, I have never had anyone ask to provide one for debit entries...

I had no idea why one would ever ask for a copy of a voided check, but I've seen it before. Interesting discussion.