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Can Electronic Check Conversion Be Prevented?

I am currently printing verbiage on the face of checks that I write specifically stating that the payee is NOT authorized to initiate an EFT for payment of a check and the check may not be electronically converted. I am also stating on the face of the check, under the check number, that the serial number is not valid for electronic check conversion. After studying 12 CFR 205 (FRB Regulation E) it seems as though this is the my only chance as a consumer to prevent this practice. What is your opinion? Is the front or back of a check the correct place to put any authorization or conditional information?

Answer by John Burnett: I am not an attorney, but I am frequently concerned about "self-help" solutions like the one you're using.

You have the trump card when a merchant asks to convert a check at the point of sale. All you have to do is refuse. Of course, the merchant can overtrump you and refuse to accept your check. Do you have a backup plan, like cash or plastic?

When dealing with payments made by mail, a biller will include a notice in the billing materials. An attorney might argue, I suppose, that your remittance by check would constitute acceptance of the notice and authorization of the conversion, your printed notice notwithstanding. I don't know how that would settle out in court. Do you really want the hassle?

Consumers will eventually realize that continued expectations of "business as usual in the 20th century" have to give way to the reality of business in the 21st. If the payments system fails to stop the paper check from being transported and processed using old technology, use of the paper check will eventually become so expensive as to make it unattractive.


Answer by Ken Golliher All you can do to prevent it is, as John said, to refuse to allow it if it's a face-to-face transaction. That refusal must be coupled with an understanding that you might walk out of the store empty-handed. If you are mailing the check, you could choose to buy only from vendors that do not convert checks.

One of the current rules which allows some checks to be converted without the permission of the drawer is under reconsideration. In the future, consumers may be given a chance to "opt out" of some conversions.

As for any solution you devise individually, it will not work; you should consider the attempt to be your hobby. You are likely to increase, not decrease, your own frustration.

First published on 9/6/04

First published on 09/06/2004

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