Wednesday, September 29, 2004

Check 21

Does my heart proud to see Vicky get a little politically aware... on the side of the angels. All the stuff in this entry comes from her.

I hadn't heard about Check 21 until I got an email from her today, explaining it.

According to Consumers Union: Check 21 is sweeping new federal law that takes away your ability to get back your original paper checks. Under this law, consumers will be more likely to bounce checks and may find themselves paying higher bank fees. The complicated new law gives you some rights, but those rights depend on a variety of factors, including how the merchant and the bank decide to process your check.

But I think Snopes explains it a little better: You've probably bought something in a store with a check even though you don't have the money in your account at the time. You figure you have a few days for the check to clear, and by then the money will be there. It's called the "float." Well, the float is slowly becoming a thing of the past. Because of a new law going into effect in October, money will be drafted from your account immediately when you write a check. It's called "Check 21," and it allows retailers to scan your check through a machine that deducts the cash within minutes. It's essentially the end of the paper check system, as well, because the check will eventually be destroyed. There will be an image of the check online and that will serve as proof if you need it. But everything is becoming electronic, and a bank will know if a check is good right away. So, be prepared to move to an electronic bill pay system. It's the smart way to go. What about checks that you deposit? Well, the float is no longer available to you, the customer. But the bank still will hold a deposit for a few days to make sure it clears. It's not fair, but it's the way it's happening.

So, we've been warned, I guess. Mind you, we've been warned by Vicky. It's nice to see the government and the media are doing such a good job protecting us that we wouldn't have known without her!

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