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  e-Checks through the Mail

Now there's a new and better way for companies and financial institutions to process your check when you mail it or drop it in a dropbox.* And you remain in control: You write your checks as you always do - when you choose, for the amount you choose. Then you mail them as always, or if the biller provides dropboxes, you can choose to drop the check there.

What's new is that when the biller (or billing company) receives your check, your check is converted to an "electronic check." (This is sometimes called "e-check.") Then the electronic check is charged to your account -- as the paper check would have been.

* Many companies, such as insurance companies and utilities, provide an unattended dropbox for customers who prefer to drop off their payments in person.

Q. What does it mean if the company has an "electronic check" or e-check policy?

A. This means that an electronic transaction is charged to your account, instead of the paper check. The electronic transaction takes the place of the paper check.

Q. Who uses the electronic check service?

A. Just about any company that you can mail a check to. Companies that often use this service include mortgage companies, rental and lease companies, loan companies, car loan companies, financial institutions, credit card issuers, utility companies, insurance companies, mail order firms, government agencies.

Q. Who can charge my account using an electronic check?

A. Only companies which you mailed checks to - or companies you paid by dropping your check in their dropbox -- can process that check electronically.

Q. If my paper check is converted to an "electronic check", when will my account be charged?

A. Generally, your account will be charged one to two business days after the company you mailed or delivered your check to receives your payment. This is similar to a check.

Q. Who gives the company permission to electronically charge my account?

A. You do. Companies are required to notify you before you mail or drop off your check that they will process your check electronically.

Q. What if I don't want my check to be "converted"?

A. If the company tells you the check will be converted, they must do so. Contact the company if you have questions.

Q. What happens if I need proof of payment?

A. The IRS established in the 1970s that the listing on your account statement serves as proof of payment.

Q. Will the company I give my account information to be able to take additional payments from my account?

A. No. When you authorize a company to take a payment from your account, it is for one payment only.

Q. Can I put a stop payment on this check if I need to?

A. Yes. But contact your financial institution as soon as possible. They need to hear from you before the check reaches your account.

Q. If my payment bounces, can the company add a return check fee to the amount of the payment and charge my account for more than the amount of my check?

A. No. The electronic check entry must match the amount of the check. If the company wants to collect a return check fee, you have to provide express separate authorization.

Q. How will an electronic check appear on my account statement? That is, how will I know that the payment has been charged to my account?

A. If your statement lists checks in one section and electronic transactions - such as debit card and ATM transactions - in another section, then the electronic check will probably be listed with the electronic transactions. You'll see the company name, the check number, the dollar amount and an identifying word such as "PURCHASE" or "PAYMENT" or even "ACH DEBIT."

Q. Since I don't receive my check back in my statement, what happens to the check, and what if I need a copy of it?

A. For your protection, the billing company makes a copy of your check and destroys the original check. You can get a copy of the check for 2 years by calling the company directly, or by calling your financial institution.

Q. What happens if I hand the check to someone instead of just dropping it in the dropbox?

A. If the "someone" hands the check back and suggests you drop it in the dropbox, then all the same procedures apply. But if the person accepts the check, you have to sign a written authorization to okay conversion.

Q. If I was ordering by mail and the company converted my check, how do I get a refund if I return what I bought?

A. The company you sent the check to establishes its refund policies in accordance with state and federal laws and regulations and lets you know what the policies are. Contact the company directly for questions on refunds.

Q. What do I do if there's an error on my account statement? For example, what if I am charged the wrong amount, or if a payment appears on my statement that I did not authorize?

A. As always, contact your financial institution as soon as you discover an error on your account statement. Federal regulations that protect you from "unauthorized" payments Remember, always review your checking account statement as soon as you get it.
 
   
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