Privacy and the USA PATRIOT Act

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Question:

Upon receiving a non-local check, we attempted to call for check verification. The bank we spoke with said that due to the USA PATRIOT Act, they were unable to verify funds, and that we would have to deposit the check and wait for it to clear. I was unaware of this and was wandering where it's stated in the USA PATRIOT Act.

Answer:

There is nothing in the USA PATRIOT Act that would prohibit a bank from verifying a check. Some banks have incorrectly thought that the Privacy Act prohibited them from verifying a check, but this isn't true either. I'm afraid that you are dealing with a bank that is very confused and uninformed.

[Editor's note: Banks are required by tightened requirements on security of customer information to be reasonably sure of the validity of a request to verify a check.]

First published on BankersOnline.com 11/07/05