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Home > Banking Services > Checking > Electronic Checking
Electronic Checking
Lately, many banks are electronically exchanging payment information, and no longer need to send paper checks to other institutions in order to receive their payment. Check 21, a law effective since October 28 of 2005 makes it possible for banks to transfer check images electronically instead of handing over paper checks physically. This federal law allows banks to use “substitute checks” instead of original checks. These are replacement checks consisting of special paper copies of the front and back of the original document. There always should be a statement in front of a substitute check indicating that it is a legal copy of a check and that it can be used in the same way as an original check. This way you can use a substitute check as proof of payment for an original check. Remember that you are protected under state and federal laws against any errors that could arise in your account, whether you receive original canceled checks or substitute checks along with your account statement. If you lose money due to an error or problem involving a substitute check, Check 21 allows you to carry a special procedure only applicable to substitute checks that lets you ask for an “expedited recredit” and get your money back.
Electronic check conversion is another procedure in which a one-time electronic payment is made from your account using the information from your check as a source. This way, when you write a check to make a purchase at a shop or make a payment, your paper check is not processed and the payment is automatically debited from your account instead, just as in electronic transfers. If someone will use your check for an electronic check conversion, you must be noticed in advance. Also, your check will be stamped “void” and given back to you with a receipt.
If your check is processed electronically, you have the right for error resolution in case the problems are present. Your bank should investigate any errors in your transactions if you ask them to do so. Your bank can also provide a copy of a check that you need in order to prove payment.
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