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Tuesday July 06, 05:43
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Benefits Of Check 21 Appeal To US Consumers
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Ninety-five per cent of US checking account holders are unaware of the Check 21 Act, which will legalize the acceptance of electronic check images in place of paper checks in the processing system, according to a poll commissioned by NCR. Forty-one per cent of US banking customers presently receive canceled checks in the mail, but, under Check 21, may receive imaged copies of canceled checks, online access to check images or a statement with images of their checks. Despite this, 89 per cent of respondents liked the idea of faster deposit posting, and 87 per cent welcomed the idea of accessing check images online.
With 79 per cent of respondents to the survey open to receiving image-based bank statements, versus the 65 per cent that like receiving canceled checks in the mail, banks and financial entities can be sure that consumers will appreciate the changes effected by Check 21. Under the provisions, check-writers will be better protected against fraud, and those with a substitute check as proof of payment will be entitled to have erroneous or multiple check payments restored to their account within 10 business days. Fraudulent or bogus checks will be exposed more quickly than now, where fraud can take some days to be detected.
During the Check 21 transition, however, banks will advise consumers to closely monitor their accounts to thwart any attempts by fraudsters to capitalize on the shift. Paper checks are not presently covered by the Electronic Fund Transfer Act, which requires banks to reimburse customers with any missing funds within 10 business days, provided the customer notifies the bank immediately after discovering the error. Bank insiders are warning that the Federal Reserve needs to tighten the Check 21 Act rule which provides a re-credit to consumers disputing a charge, on the basis that the rule is weak and could be misinterpreted.
(Accountingweb.com)
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