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Requirements for Items Received for Collection

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Question: 
We received an item for collection in the amount of $250.00. The attached letter didn't state how long we should continue to check this account for the funds but in the past I believe that we checked for two weeks. Is this correct? Also the check was marked "Do Not Present Again" and there were holes punched in the MICR line. Can we accept this item for collection?
Answer: 

After the item has gone through Federal Reserve twice, they say it should not go through again. If we got the check through the work the second time, we'd stamp it "Do Not Present Again" and then we'd punch holes in the check to be sure that it could not go through the work again. Those holes do not affect the negotiability of the item through the collection process. It's still a good check - simply a bit mutilated.

Usually the sending financial institution will tell you how many days they'd like you to hold and try the check. If they haven't specified, your two weeks is very standard.

First published on BankersOnline.com 5/7/01

First published on 05/07/2001

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