Thursday, October 14, 2004
More Bang for Your Buck: Check Mate
If you write a check before the money's actually in your account, be warned. The process is about to get a lot faster and for some of you, a lot riskier. In tonight's more bang for your buck we're going to show you how a new law could lead to more bounced checks.
(WSVN) -- Paying bills online and using atm cards at the store both have modernized our checking accounts.
But now, the federal reserve is going a step further.
Starting october 28, a new law called Check 21 will take effect -making checks clear in hours rather than days.
David Floreen from Bankers Association: "It's squeezing out the inefficiencies that are ever present in today's system."
Here's the difference.
Traditionally, most personal checks get physically shipped between three different banks before they clear. The whole process takes two to five days.
Now, with Check 21, once you deposit a check in the bank, an image of it will be sent electronically to other banks. This way, your check will clear in a few hours.
Gail Hillebrand from Consumer's Union: "It's now more important than ever, never to write a check unless the moneys already in the account."
Once Check 21 takes effect, banks will no longer have to send you your cancelled checks because the checks will no longer exist. They'll be replaced by substitute checks- which are legal copies of the originals.
"I think it's excellent, speed up the process," said one consumer.
"I wouldn't really trust a bank with something like this," said another consumer.
Check 21 starts at the end of october, so in the mean time. You might want to balance that checkbook. And come November, take a closer look at your bank statement.
David Floreen: "It's a lot more efficient and cuts down on fraud. And puts money back into people's accounts quicker."
Two consumer groups are requesting banks waive bounced check fees immediately after Check 21 becomes law. So far, no decision yet. If you have questions regarding any fees to your checking account, talk to your local bank or credit union.
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