Things I've recently learned about banking which may shock you

[St. Theresa]

This is going to be long. I apologize.

I'll start with the most shocking thing. Did you know that a check that has cleared your account could eventually "unclear"? I'd never heard of such a thing, but it's true. Here's the story:

One of my clients rents out small apartments on his property. A prospective tenant contacted him by email and when my client agreed to rent to him, the supposed new tenant sent a check for MORE than the amount he needed to put down. He said he wanted to pay some of his weekly rental payments ahead of time.

My client put the check in the bank and it cleared.

Next thing that happened was that the supposed tenant contacted my client and said he shouldn't have overpaid, because now he lacked the funds needed to move. He asked for a refund of the overpayment, and insisted it needed to be wired to him.

My client went to every Western Union desk he could find. Each time he tried to send money, he couldn't. I don't know what they called it, but they simply said that the transaction could not be made.

Client and supposed tenant continued to email, and supposed tenant suggested my client try to wire smaller amounts. Still, no go. He never did manage to get the money to the supposed tenant and it's a good thing because....

My client got a call from the FBI. The supposed tenant was a scam artist and the check he'd sent was bogus. The bank had been fooled, but now that they were onto it, the funds were going to be removed from my client's account. The check had "uncleared" after an entire month!

He's darn lucky he didn't lose any money in this clever scam. Meanwhile, it's very scary to know this sort of thing can actually happen!

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Next thing I learned. Cash deposits are not necessarily credited to your account immediately. I have NEVER heard of such a thing. I made a cash deposit (Bank of America) to a human teller one Friday evening, because I had to go home and pay a bill out of that account. I paid over the phone, and the debit went through before my deposit was credited and it bounced, leaving me with a $35 fee!

When I went back to the bank to complain, the woman "helping" me showed me the screen and said, "See? You made the payment before you made the deposit. It's right here."

I told her I didn't care WHAT the screen said. I had a time-stamped deposit slip and I was sure the time of my payment was also recorded (with Comcast.) I was told by another bank employee that cash deposits do not clear your account until the next day if the deposit is made after 2:00 p.m. What hogwash!

Ironically, the teller had asked if I wanted to know what my current balance was after the deposit. I thanked her for the suggestion and said that yes, I would like that. The balance she wrote down was more than enough to cover my bill.

I did this when I came back to complain about what happened: How could Comcast get their transaction through so fast and since when did cash stop being treated like cash!?

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Next story - a long one. I started my business in 1999. One of the things I did was sign up for a merchant account so that I could accept credit cards. I did this with Card Services International. Because I didn't know better, I agreed to pay $36.40 per month to lease the machine I need to process the cards - for four years. The retail value of the machine? $125.

Ok, so that's MY bad. I wrongly assumed that the machine was worth a lot more than it is and signed an agreement with CSI and, so, I accepted the responsibility for that.

When the monthly debits began to come out of my account, I noticed they were from yet a different company: Northern Leasing Systems, Inc. Google them. You will be amazed at the number of complaints about them.

Now, I never signed any paper work with this second company. I signed a lease agreement with CSI. I gave CSI a first and last month's lease payment and gave CSI a voided check for the purpose of debits and credits to my account. They, in turn, gave this info to NLS.

In 2003, I had the right to "buy out" the machine for around $200, thereby relieving me of the monthly debits of $36.40. It was around this time that I had a new man in my life and he had just moved in and it turned out that Mr. Right was completely Mr. Wrong. For the next four years, I went through complete hell. I was depressed beyond depressed and diagnosed with PTSD after he finally left. I let so many things go, and this lease was one of them. Stupidly, I paid for FOUR MORE YEARS, before I contacted them in August and said, "Ok. I've more than paid for this machine. It's time to stop the debits."

The rude woman on the phone (and they're ALL rude) told me I still had to buy it out. I told her that in four years of extra lease payments, I had bought it out and then some. I wasn't asking for a refund. I simply wanted us to call it a wash, which I thought was more than fair.

I wrote an email to the company, which they ignored, and the debits continued. In October, I called my bank. A very helpful woman did a lot of nice things for me. First of all, she set me up with a new account. She put a stop payment on this monthly debit without charging me the fee for it. I had six months, she said, to transfer my legitimate debits to the new account, at which point I could close my old account and NLS couldn't touch me anymore.

As soon as NLS tried and failed to debit my account, they sent me an invoice. It was dated Nov. 15 and it had a due date of Dec. 1. It was for two months' worth of lease payments, plus a $5 service fee. I called. I told them the invoice needed to go away. Again, I mentioned the fact that I had spent approximately $3500 on a $125 machine and that I was done paying - period. I told her I was retroactively excerising my right to buy the machine out, and the buyout fee could come out of my overpayments. She said it didn't work that way. The conversation went downhill and she hung up on me.

I wrote another email to the company, telling them what I told her.

Next thing I know, I look at my accounts, and NLS had debited me for over $200 on November 23. I didn't have the funds in the old account to cover it, but the bank paid it anyway, leaving me in the red. I said that charge needed to be reversed. I was told to send specific information to their corporate returns department (as this is a business account) and they would handle it. I filed and, after 10 days, I finally called and was told that corporate returns must be filed within 24 hours of the debit! After 24 hours, you're out of luck!

What this means is that if you have a business account, you must check it EVERY day.

I tried to go through the fraud dep't, but because I allowed the company access to my bank account, I could not claim fraud. I have to sue.

Ok, so how did they manage to debit my account depsite the stop payment? Easy! They just debited it for a different amount. It is the amount that's flagged, not the company. They could have continued to debit me for lease payments by charging me $36.41 instead of $36.40.

Just to make a long story longer, the amount they debited me was about 3 times the amount they'd invoiced me for AND they debited be before the due date THEY imposed. The woman who hung up on me put a note in my account that I refused to pay, so they took it upon themselves to exercise my right to buy the machine and end the lease. Oh, and I suppose the first and last payments I made don't count for anything, either! GRRRRRRRRRR!

Here's where it gets even more fun. Every time I spoke to them, they referred me to the lease they insist I signed with them. I NEVER signed anything with them. As I said before, I signed agreements only with CSI.

What's really funny is that if you call NLS, you get a recorded message and your first choice is to press 1 for a copy of your lease. They do this because NOBODY has a copy of their lease because the lease is pieced together after the fact.

I was asked if I'd like it faxed to me. I was all, "Oh, please do! I'm dying to see this!"

And it came. And it's clear to me that it was forged. I compared the signatures to my actual signatures with CSI, and it's obvious someone with a talent for forgery copied them. My sig comes out different every time. It appeared twice on the document with CSI - and the same differences (and similarities) were evident in the bogus lease with NLS.

I'm told I have a good case and that if a judge finds that NLS was fraudulent, the entire lease will be nullified and I will be entitled to ALL of my money back - all $3700. This is at the top of my New Year's resolutions list.

So be careful who you allow to have access to debit your bank account. You might pay dearly for the convenience. Now, of course, where a merchant account is concerned, I have no choice. But I will, from now on, avoid allowing companies to take money from me through my bank account number. Once you give them access, they can do just about anything they want!

Wish me luck with the suit. $3700 would come in REALLY handy.

[disneysteve]

Your first story is an extremely common scam today. Happens a lot on auction sites. There are even public service ads running on TV and in magazines about it. Somebody wins your auction for a $100 item and sends you a check for $250, then asks you to wire back the extra. You do so before the check has cleared. When they finally discover the check is a fake, the buyer is long gone and you're screwed out of the money.

If you sell online and even accept checks, which you probably shouldn't, if you ever get a check for more than the sale amount, just send it right back. Don't deposit it or cash it and never, ever issue a refund for the overpayment.

[threebeansalad]

I live in a college town. The first scam you described happens here when students try to sublet their apartments for the summer. Someone agrees to sub-lease the apt (typically site unseen), sends a check for OVER the value, and asks to be wired the overpayment. BEWARE!

[duke4ever]

True! A friend had almost the same case renting out his apartment for the summer! This is such a common scam these days! Shameful indeed!

[St. Theresa]

Wow, I didn't realize it was so common. And I have never, in my life, heard of a check clearing, then UNclearing later.

You do so before the check has cleared.

Oh, never in the world would I send money BEFORE the check has cleared.

[Caoineag]

Fortunately cash is still cash at my bank (instant availability) but their check policies can be ridiculous. One time it took them 14 days to clear a check to my account. After that I would make the cashier cash my checks and then deposit the cash because I was so furious. Payroll checks should never take that long! Fortunately, direct deposit clears on the day its supposed to so I haven't had an issue since.

[buzz]

Things about banks that may shock me? Good luck.

[jasanderson]

If you signed a lease with CSI and you are being billed by NLS is it possible the account was sold? Still it sounds like a huge challenge. If you know what state they are located you should really file a complaint with the Better Business Bureau and also with the State's Attorney's office. If they have a history of this they would possibly step in and you wouldn't have to worry about legal fees.

[tabbycat31]

I work in a community bank, one that still has human interaction.

At some of the bigger banks, there are policies that say "deposits made after 2:00PM are available the next business day", etc. That's because the bank's calendar resets at 2.

AS for payroll checks. That depends on whether the check is local or non-local (as determined by the routing #). Many larger employers (chains) only draw their payroll checks on the bank taht their corporate HQ uses, and if that's not local, the employees w/o direct deposit are screwed. I know of (off the top of my head) the following large employers do not use local to me (NY, NJ, CT, PA, DE) banks......... Burger King, WalMart, Target, Kohl's, Home Depot, Lowe's, and Costco. A non local check takes 5 business days to clear whereas a local check takes two. The checks that take one are Postal money orders and government checks. The only "instant availability" checks are ones drawn on the same bank.

[St. Theresa]

If you signed a lease with CSI and you are being billed by NLS is it possible the account was sold? Still it sounds like a huge challenge. If you know what state they are located you should really file a complaint with the Better Business Bureau and also with the State's Attorney's office. If they have a history of this they would possibly step in and you wouldn't have to worry about legal fees.

No. CSI handles my credit card transactions and debits me for fees related to the merchant account. NLS is the leasing company CSI gave my info to. My documents with CSI say that a third party will be handling the equipment lease.

I did file a complaint with...oh, something. I'm so tired now, I forget. The precedent against them has already been set. The governor of Missouri sued them. And a suit in NY resulted in the judge finding them guilty of fraud. It should be pretty easy getting some money back, but it may take time

Buzz: LOL!

Tabby: I've yet to check on this, but someone told me that it's illegal not to credit cash right away in our state. They can talk about their clocks all day long, but cash is cash. Always was before, anyway.

[safari]

I work in a community bank, one that still has human interaction.

At some of the bigger banks, there are policies that say "deposits made after 2:00PM are available the next business day", etc. That's because the bank's calendar resets at 2.

AS for payroll checks. That depends on whether the check is local or non-local (as determined by the routing #). Many larger employers (chains) only draw their payroll checks on the bank that their corporate HQ uses, and if that's not local, the employees w/o direct deposit are screwed. I know of (off the top of my head) the following large employers do not use local to me (NY, NJ, CT, PA, DE) banks......... Burger King, WalMart, Target, Kohl's, Home Depot, Lowe's, and Costco. A non local check takes 5 business days to clear whereas a local check takes two. The checks that take one are Postal money orders and government checks. The only "instant availability" checks are ones drawn on the same bank.

I never understood why non-local checks take longer to clear. These days all transactions are performed electronically, and the banks no longer have to mail the physical check to the bank it was drawn on. It shouldn't matter if the other bank is local or across the country. I think the banks just don't want to change their policies because they like having my money for a few extra days.

[tabbycat31]

I know before check 21, the paper check actually had to be shipped to the appropriate Federal REserve and it would actually go the appropriate bank. Now we scan the checks and transmit them to a larger bank. I'm not sure what the big bank does with them from there.

That said, many of our customers have a "no float payroll" memo on their acct. If their paycheck is from one of the big box stores I mentioned before it will be available immediately. That said, if they get a check for Christmas from Grandma across the country, that check will be held.

[buzz]

I never understood why non-local checks take longer to clear. These days all transactions are performed electronically, and the banks no longer have to mail the physical check to the bank it was drawn on. It shouldn't matter if the other bank is local or across the country. I think the banks just don't want to change their policies because they like having my money for a few extra days.

I think you may be onto something there.

[vsjhoc]

I never understood why non-local checks take longer to clear. These days all transactions are performed electronically, and the banks no longer have to mail the physical check to the bank it was drawn on. It shouldn't matter if the other bank is local or across the country. I think the banks just don't want to change their policies because they like having my money for a few extra days.

Exactly. I deposited a big check from American Express when I sold some mutual funds. My bank (Citibank, or Sh*tty Bank, as I refer to it) said it would take some ridiculous amount of time to clear. I said, "Are you kidding? It will clear and be sitting in the bank's coffers before I walk out the door!"