# Embarrasing, but I gotta tell ya - CHECK IMAGES



## TigerFan (Apr 11, 2006)

I have learned a hard lesson. Please learn from this.

My business has struggled the last 12 months. 

4 months ago I paid a sub via check on the same day I received funds from the homeowner. Told the sub do not deposit yet - it will take a couple days to clear and become "available" funds in my account.

Well, sub deposits the check ($5k) and it bounces. He calls, tells me check returned NSF, I say "no ****" and tell him I'll pay when the money clears in a few days. I ask for the check back and he says the bank does not return the check - it's just an electronic "image" of the check. I call his bank and verify, sure enough, check is shredded, they only send an "image" of the check.

3 days later, I go to his bank and make a $5k direct deposit to his account to cover the NSF check. Everything's cool - we keep working.

The sub and I part company at the beginning of Sept. Fast forward to last week. He goes to my bank and CASHES the check image!

Yes, a plain paper copy (image) of the original check is now considered LEGAL TENDER for the original shredded check.

I'm out $5k right now and fighting the bank to have it replaced, which I'm 80% sure I'll get done. Police report filed and expect him to be picked up in the next few days.

It is without a doubt outright fraud, but it has cost me days of work time to fight through the police / DA / Attorney / jurisdiction mess to get to where we can prosecute.

There's alot more to it, but bottom line is 1- sloppy work by the bank and 2) ignorance on my part of the fact that an "image" is actually casheable has cost me more than the $5k that I'm down right now.


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## Chris Johnson (Apr 19, 2007)

Lesson - Never write a check unless you have the money in your account

It is scarry someone can cash essentially a photo copy of a check. My wife used to sign my business checks before I had her signature added to the account, didn't really matter, they cleared them anyways, how's that for quality control?


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## daArch (Jun 8, 2007)

Check ???? What's a check ??? :laughing:

sorry, couldn't resist - with plastic and electronic funds transfers, who uses checks. 

Can we all remember the days when checks were actually the safe way of payment ?

I'm beginning to think cash is now the safest.

thanks for the lesson. sorry to hear you got defrauded.


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## Cole (Aug 27, 2004)

Damn, I didn't even know that could happen!

Sorry to hear about the situation at hand.


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## TigerFan (Apr 11, 2006)

Chris Johnson said:


> Lesson - Never write a check unless you have the money in your account
> 
> It is scarry someone can cash essentially a photo copy of a check. My wife used to sign my business checks before I had her signature added to the account, didn't really matter, they cleared them anyways, how's that for quality control?


I should add, to reduce the embarrassment, that my balance in the account was enough to cover the check, but my "available" balance was only about $3500.


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## Kent Whitten (Mar 24, 2006)

I also didn't realize until lately that my bank cashes post dated checks. No...not mine! My parents have a tenant that likes to do that, make post dated checks. We cash 'em anyway.


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## Grumpy (Oct 8, 2003)

Thanks for the heads up, good to know!


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## bigchaz (Jun 17, 2006)

must depend on bank. Bank of America sees me every couple days and they give me grief if someone makes a mistake writing the company name out. 

I also cant cash checks to my business account.


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## Floordude (Aug 30, 2007)

For business accounts, Bank of America is the worst.

I'd shop around for a new banker, we did and it has been a blessing.


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## Cole (Aug 27, 2004)

Floordude said:


> For business accounts, Bank of America is the worst.
> 
> I'd shop around for a new banker, we did and it has been a blessing.


I agree, BOA is the absolute worst bank to have to deal with.


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## woodman42 (Aug 1, 2007)

I isn't just Bank of America.
Several times I have taken checks issued to my company to the issuing bank and they wouldn't cash it.
I even took one to my bank (Chase) to deposit it with less cash on it and they wouldn't do it either. Had to deposit then make seperate withdrawl.
Go figure.
No I never issue a check without having the funds to issue. I simply tell them I will give them a check in a week, which is still less than 30 days.
But I usually try to keep enough cushion in that account to have enough to pay subs right away.


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## HemiMan2500HD (Mar 9, 2007)

it says right on the paper that they send you that the image is just as good as having the original check. You really have to be careful with those


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## shed-n-deck (Sep 25, 2007)

Yeah, that's tough....I hope that you recover the $5K. I couldn't fathom having that much money taken from me. I don't deal with checks much, if a HO gives me a check, I'll take it to their bank and cash it, and then put the cash into my account, that way there is less wait to find out if the check is even going to clear. That only works for smaller amount checks, less than $1000 usually. Thanks for the tip.


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## GregS (Oct 1, 2006)

It used to be that a napkin would be consider as a legal method of funds transfer between two parties providing that there is: 1) a name of who the money goes to, 2) an amount both numerical and written, 3) bank/branch number, 4) account number, 5) Signature


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## daArch (Jun 8, 2007)

I could be wrong (not the first time, nor the last), but I believe that a check written TO a company is treated differently at the issuing bank than one to a person.

As we all know there is a lot of fraud with checks being cashed, so I am not surprised that a bank wants a check deposited to an account at thier bank instead of redemed for cash.

And as you have all probably heard, there is an organized "gang" who is able to make countfeit checks from comapnies and then cash them. These people have hit the southwest and recently the northeast. I am sure banks are making that practice harder - and the honest hardworking stiffs are the ones that are most affected.


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## wackman (Nov 14, 2005)

Years ago a company tried to steal money from me through those "check by phone" systems. 

You give them all your checks numbers and they generate a check of their own and deposit it. I bought something that way, and after that every month or so they tried doing it again but I wasn't buying anything else and they started making it for absurd amounts. I originally bought a $500 item but they started generating checks for $2500. 

My bank said it's perfectly legal and there was no way to stop them from doing it over and over, so my only recourse was opening a new account with different numbers and changing all my bill pays, automatic withdrawls, etc...

Pain in the ass. 

They just kept claiming it was an accident and that it was fixed but after 4 bogus check attempts I just cancelled the account.


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## TigerFan (Apr 11, 2006)

It's called the Check 21 system... here's all the info.

http://www.federalreserve.gov/paymentsystems/truncation/faqs2.htm

The print on the image does say it's legal tender -- I think the problem, for me at least, lies in the EASY duplicability of this type of payment tender. I'm stunned this is actually real and legal.

Anyway, I meet with the bank tomorrow. Bottom line is, we warned about "checks" coming through and the bank handled the transaction sloppily. It helps that we had another incident or two with my bank in the past, clearly their fault and they made good on it then, but that helps bolster the case that they need to own up their shortcomings and make me whole. We shall see.


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## Chris Johnson (Apr 19, 2007)

TigerFan, # 23 in that list applies to you. You should be receiving a full credit towards your account and some form of ass kissing if this is the third time the bank has messed you up


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## Frankawitz (Jun 17, 2006)

TigerFan, Sorry to hear you got the run around, I had The Yellow Book USA stick it to me years ago, I had signed a proposal for placing ads in their phone books, I had to give the sales Rep a deposit check in good faith $90.00. No problem, well about 3 months go by and I was checking my account when I noticed three withdrawals for $150.00 each I talked with the bank and asked for was going on and they said that they were checks and the bank honored them and cashed them, so when my statement came I checked out the checks well they were made out to Yellow Book USA Inc. They had takin my routing number and account number off the deposit check I had given the Rep and they made up three different company names and run them thur my account, I asked if this was Legal and the Bank told me yes and there's nothing that can be done since they had the routing number and account number, So guys don't let a shady person get a hold of those numbers or you can be cleaned out and there nothing you can do. Then I get a call from Yellow Book USA collections wanting the balance I owed for the phone book ads, well I hold them after what they pulled they could kiss my azz I wasn't giving them a dime. The kicker is they have printed an ad for my company in their books for the past 4 years now, I still aint gonna pay them. Yellow Book USA is nothing more then a Rip off company.


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## wackman (Nov 14, 2005)

Frankawitz said:


> TigerFan, Sorry to hear you got the run around, I had The Yellow Book USA stick it to me years ago, I had signed a proposal for placing ads in their phone books, I had to give the sales Rep a deposit check in good faith $90.00. No problem, well about 3 months go by and I was checking my account when I noticed three withdrawals for $150.00 each I talked with the bank and asked for was going on and they said that they were checks and the bank honored them and cashed them, so when my statement came I checked out the checks well they were made out to Yellow Book USA Inc. They had takin my routing number and account number off the deposit check I had given the Rep and they made up three different company names and run them thur my account, I asked if this was Legal and the Bank told me yes and there's nothing that can be done since they had the routing number and account number, So guys don't let a shady person get a hold of those numbers or you can be cleaned out and there nothing you can do. Then I get a call from Yellow Book USA collections wanting the balance I owed for the phone book ads, well I hold them after what they pulled they could kiss my azz I wasn't giving them a dime. The kicker is they have printed an ad for my company in their books for the past 4 years now, I still aint gonna pay them. Yellow Book USA is nothing more then a Rip off company.


Watch it, I know a guy who had a similar situation and they eventually screwed up his credit while he fought them. Says now that he wishes he'd just paid the money to make it go away and save his credit.


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## mdshunk (Mar 13, 2005)

A 'non encoded check' is perfectly legal. You can write a legal check on a brown paper bag if you want to, as long as it contains the proper information.


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## Grumpyplumber (May 6, 2007)

Cole said:


> I agree, BOA is the absolute worst bank to have to deal with.


*After requesting they remove me from their mailing list several times, I finally walked into the bank with an envelope with a bold red stripe across it marked in big bold letters "Important notice regarding your credit bureau status".*
*It was a solicitation for a credit card that had me on the phone for a half hour attempting to find out why I was being alerted about my credit.*
*Marketing is one thing, that was plain sleazy, I was happy to close the accounts and tell them why.*


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## L. B. Condulet (Aug 23, 2007)

*It's a no brainer....*

Should have stopped payment on the bounced check.


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## TigerFan (Apr 11, 2006)

L. B. Condulet said:


> Should have stopped payment on the bounced check.


If you would read my title and first post correctly, at the time I did not believe there was a physical check out there somewhere to need a stop payment on.

The purpose of the post is to warn others that this new law, the Federal Check 21 system, allows for the printed "image" of a check to function just like the check.

If I had thought there was a check out there, I would have made sure to get it back when I paid him new funds back in May.


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## The plumber (Jul 5, 2007)

That's some b.s. My girlfriend thinks I'm paranoid because how I do my banking, but this just proves my point. 
I would find and follow that guy and report everything he does to the city. With his integrity he's bound to rack up $5,000 in fines in no time, but that's just me. I would gladly loose $10,000 worth of my time just to cost him $5,000.


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## Dibs (Oct 3, 2007)

I feel your Pain TigerFan and thanks for the warning..


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## TigerFan (Apr 11, 2006)

The plumber said:


> That's some b.s. My girlfriend thinks I'm paranoid because how I do my banking, but this just proves my point.
> I would find and follow that guy and report everything he does to the city. With his integrity he's bound to rack up $5,000 in fines in no time, but that's just me. I would gladly loose $10,000 worth of my time just to cost him $5,000.


Well, bottom line is we are having him and his girlfriend arrested. 

To add to your bank concern, get a load of this: There was a second "image" outstanding he had, this one for $3,000.00. He got that one cashed too.

This is AFTER we put a stop payment on the check - but the bank claims our stop payment, which we did through their online system, did not reach their network. 

So I'm actually out $8,000. We've had to lawyer up with the bank - because we can prove we submitted the stop payment and it is a problem between their third party online banking company and their records. What a mess.

But be assured that I am pursuing the sub until his azz is in jail.


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