Check 21. It's all you hear about in financial circles. As of October 28th, 2004 new laws went into effect that have changed the way you write checks and worse. They will further limit your rights and grant more to those wonderful institutions that hold our dough: Yep the underprivileged banks.
Here's the scoop. In the old days you could write a check on Sunday (even though you might not have quite enough in the bank) - give it to the clerk knowing you could still deposit your check on Monday to cover the amount. It was always technically illegal - known as "check kiting" (like a kite you fly). Illegal or not, it was like jaywalking. Everybody did it from time to time but you never saw Channel 2 flying overhead with news choppers as Orlando's finest ran down offenders.
Thanks to the new system ala "Check 21" merchants will now clear your check electronically in a matter of minutes to hours. Yes even on nights and weekends. So if you don't have the funds in the account. Bounce, bounce, bounce.
My initial response to this was "no bigee" as long as I know the rules, I'll play along.
But. Here is the real danger. Because the checks filed electronically are known as substitute checks, you will no longer get an actual paper check back. Ok so that's not so bad - heck credit unions have been doing that for years. Right?
Here's the zinger. During this transition, there will undoubtedly be tens of thousands of "double drafts" while the banks work the bugs out. This means your account gets hit twice for the same check as the system goes from paper to electronic. Well, did you know that you now only have 40 days to catch a bank error or the bank can keep your money!!! It used to be 60 days, but our politicians worked in a nice shortening of YOUR RIGHTS when the new laws are put into effect. Wanna hear something really scary? If the bank finds that they made an error, the law says they can come back and get you indefinitely!!! This makes me so mad my blood boils. Can you believe it?
The point is to now look, very quickly, at your bank statements to check for errors. If you don't, you may be giving the bank your money for good.
It amazes me the lengths large banks will go to further alienate their clients. I came from a small town. If you were a banker and even thought about keeping someone's money because they didn't catch the mistake within 60 or 40 days...well, let's just say that you'd have a difficult time getting the feathers off. (Metaphorically speaking of course - sawdust was more readily available.)
To your financial health!
Dan Dowling
United Mortgage Capital Corp.
http://www.myloanadvisor.com/
Copyright 2007 all rights reserved.
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