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Posts Tagged ‘What if something goes wrong?’

Let’s say the wrong amount was deducted from your checking account. Or maybe you’ve discovered a payment that you never authorized. No matter how your check was processed, you should contact your bank right away. The bank might be able to clear up the problem quickly.

Even without a cancelled check, you can prove you made a payment with your bank statement, which shows the date and amount of the payment. You also might have a receipt from a retail transaction. In any case, the law does not require you to have the original paper check, or even a copy of it, to resolve a problem with a bank.

Generally speaking, you will not be held responsible for processing errors or transactions you did not authorize.

Different laws and rules apply, depending on how your check was processed.

• Under conventional check processing procedures, you won’t generally be held responsible for payments you didn’t authorize. The applicable law is a state law called the Uniform Commercial Code (UCC). Your precise rights, the length of time you have to fi le a claim, and the way you can fi le a claim, may differ depending on how the UCC was adopted in the relevant state.

• The UCC also applies if a substitute check is involved, but so does the Check 21 Act. Check 21 provides for a special refund called an “expedited recredit” that applies only if you received a substitute check. To obtain this refund, you generally should contact your bank within 40 days of the date your bank provided you with the substitute check, or the date of the bank statement showing the problem. You must submit your claim in writing, along with information necessary for the bank to investigate. If the bank determines that your claim is valid, the bank must credit your account by the end of the next business day. If 10 business days have passed since you fi led the claim and the bank has not determined whether the claim is valid, the bank must credit your account for at least part of the amount in question while it continues to investigate.

• Electronic payments, including those involving ACH (such as a converted check), are governed by the federal Electronic Fund Transfer Act and Regulation E. You generally have 60 days from when you received the bank statement showing the error to notify your bank about the problem. Within 10 days after you notify the bank, the bank is required to investigate its records for an error; if the matter is still unresolved after 10 days, the bank must temporarily credit your account for at least a portion of the disputed amount and continue investigating for 45 days.