It’s sure to be a pain in the butt if you accidentally switch two of your payments — but we’d always assumed that companies like AT&T and Dell wouldn’t cash checks that were not even made out to them. We we wrong!
Meet Dennis Hallet and his wife, Sandra. “In thirty years I’ve never crossed up bills. I managed to send Dell my AT&T check and I sent AT&T my Dell check,” Sandra told CBS 13.
Dell cashed the check made out to AT&T and applied the $235.00 toward Sandra’s balance. AT&T cashed the $1138.33 check made out to Dell and applied the entire thing to the Hallet’s phone bill. This left them with a credit of $903.33.
Meanwhile, interest was piling up on her Dell account. When she called AT&T to see about getting her money back, they told her it was her fault they cashed a check made out to another company and told her they’d give her money back in two months.
CBS13 called and got AT&T to apologize and refund part of the money in 7 days– with July’s bill deducted. When asked why they cashed a check made out to another company, AT&T had no answer, so if you’re mailing a couple bills at the same time — make sure you put the checks in the correct envelopes and save yourself a huge headache.
Call Kurtis: Check Switcharoo [CBS13]
(Photo: jetsetpress )
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@juniper
the thing you miss is that the machien also OCR’s the text in the amoutn box. Otherwise the ywoudl be guessing at what the amount is (and you could pay your $999 dollar bill from verizon with a $1 check. It would be a simple effort to also OCR the payment to line and flag things that don’t match. There is already built in functionality to have people review possible OCR errors (or OCR unable to reads) this should be the same situation for the to line.
Full disclosure: I developed OCR equipment and procedures as part of an internship that were used by the USPS to read the ENTIRE address on your envelope (creepy huh)
I think I would use the GirlCat method if this happens to me. Oops is not a legal defense and this is a crime.
@TechnoDestructo: I’m pretty sure it’s only illegal when people do it. It’s not illegal for corporations to do it. Something about intent.
BofA’s online bill pay isn’t the answer either. I authorized a payment to my electric company for $54.84 and BofA sent them $5484.00 which needless to say I did NOT have.
Even though I caught what had happened within hours and contacted customer service to get it corrected, they told me that they would make three attempts to debit my account over a three day period before the amount would be deemed unpayable and returned to them, and that there would be a $35 fee for each attempt.
Sure enough, I got 3 $35 insufficient fund fees for a total of $105 right off the top of my next Social Security direct deposit. That’s an eighth of my total flipping income.
I called CR after getting a couple of outside agencies and consumer groups involved and several days of hassling they agreed to refund the fees but as what I can only assume was a parting shot they then charged me a $35 “returned item” fee.
I gave up on that one. I figured what the hell, if they’re that damned desperate, let them keep it.
@juniper: I don’t doubt that some machines don’t read it because it’s understandably not a high-priority issue. But if machines can read the legal amount, they can read the payee. From the description of the A2iA reading software:
Intuitively, a not-terribly-challenging problem is to simply assign a score to the metric “This check should be written out to AT&T. What’s the probability that this scrawl says AT&T?”
I’m surprised that some systems would really by able to get away with only checking the number in the box, since I’m still of the impression (after searching Google) that it’s not legally binding.
@ibored: We’re talking about two different things – an OCR on the kind of remittances that the OP would have sent our are Unicode OCR codes (usually OCR-A). A different kind of reader reads the digits in the amount box if it can, after they are scanned into an image. The Unicode is scanned and immediately associated with the check’s own information at the bottom (bank routing number, account, check number), the amount is another step in the process that happens after the check is image-scanned and the digits in the box “read.”
The Post Office has a very different system than that for commercial lockbox vendors – they are reading something for an entirely different purpose and there is no association between multiple pieces. Apples to oranges.
@Dr Jones:
>>What is with the bad spelling people!<<
Uh… wasn’t that an interrogatory sentence? And if so, wouldn’t a question mark have been the more approprate puncuation?
@Michael Belisle: You’re right, it’s not legally binding. We recently had someone put “2″ in the number box and “Two Hundred” in the text line… and the number that got recorded was two, regardless of what he checked off on the remittance slip and what he wrote. There are limits to the technology.
I’d be curious to know who uses that software. I live in a large market for lockbox vendors and have toured six facilities, all of different banks, and none have this kind of technology in use. They still use people to read and key these things if a client requests it. Eventually all the banks invest in this stuff to one-up one another, but until then, we are left with the masses.
When I was a kid (that’s a good excuse for everything, right?) I had a part time job and I owed the IRS $1.
I made the check out to the Infernal Revenue Service.
I made sure my handwriting was very clear. The check was cashed, there were no problems, and they didn’t even send somebody to kneecap me.
Now, I sure as hell wouldn’t do that today…
This is absolutely the bank’s fault. They’re processing checks without bothering to confirm that they are made out to the person/business depositing the checks.
@tande04: The bank takes it because the transaction is EFT rather than the company actually cashing the paper check.
@juniper: The Post office has had OCR for several years. Only 5% or so of first class mail is hand sorted these days, and that’s just limited to oversize or odd shape items. The machinery can read the return address and the to address and sort the mail all by machine right to the individual routes. these OCR machines all do this within a fraction of a second even on hand-written mail. I understand there’s a difference between the USPS system and what the lockbox companies. But the technology DOES exist to read every handwritten character on paper.
This also does not negate the fact that the digit amount on the check is not the legal amount. I learned very quickly from running cash registers that if the written amount was not correct for the transaction and the store accepted it the customer has no obligation to correct the error. So obviously since the lockbox companies are able to recognize what the written amount says then it shouldn’t be a huge stretch for the machines to recognize the payee.
@Michael Belisle: Interesting. Like juniper I’ve never seen this in place. The problem, as I see it, would be clients that have boxes that have literally hundreds of acceptable payees. It’s not always as simple as one or two.
Example: a place like a hospital, where checks might be made out to any given doctor, but in fact be sent to the same lockbox. It would be interesting to see whether or not the probability can remain high enough to be significant or worthwhile.
@enm4r: That’s a good point – I never thought of that. My org has about 12 acceptable payees that mean “us.” We do occasionally get a live check for the wrong payee mailed back to us, caught because it came with no remittance slip or because it had the wrong remittance slip.
I tend the catch the wrong-payee stragglers because my org has the bank send us the scans of the images of the check and remittance (and envelope, for what it’s worth). It’s my job to read them over because people correct their addresses or send us messages on the remittance slips (and sometimes the memo line on the check). I’ve caught two wrong payees in the past year.
SOP for the bank should be to reject this check. Why it was accepted by the bank is another story.
Same thing happened to me years ago – sent the rent check to the credit card company and the credit card check to the landlord. The landlord called and said I had to send a new check; the credit card company cashed it, the bank processed it. When I called the bank to see why, I was told they don’t double-check those kind of transactions. At least my rent at the time was more than my credit card bill, so I didn’t wind up paying interest on the balance.
C’est la vie.
@juniper: @enm4r: Now that I think of it, I remember hearing about the special ink in the courtesy amount box, which would be presumably be uneccesary with modern technology. So I imagine it’s just a matter of the investment it would take to upgrade to more comprehensive automation. If the errors are rare and check use is declining, I can see how it might not be worth it.
Thanks for the info about what goes on behind the scenes.
This happened to my grandmother and it was a total nightmare! She sent the wrong check to her insurance company and trying to get the money back was insane. Of course we asked, why did you cash a check not made out to your company…we got for an answer “Why did you send us a check that wasn’t made out to us?” Um, because the 96 year old lady has a hard time seeing????!!! No one looks at anything anymore, we were just happy they weren’t going to try and charge us some type of fee to get things fixed.
Online bill pay through banks, that’s what I use. Put in the account info, and then on payment day, just pay it online. No need to send it. I can even set it up to pay on a specific day for months.
Or, take the kit and caboodle down to the bank. Mine will pay my bills “free of charge” with the teller.
@ibored: I should clarify that I filed the police report in good faith, thinking my check had been stolen. I don’t know if you can file a police report based on a company cashing an incorrect check and then refusing to refund your money. Unfortunately, this never came up on Law & Order.
@ Dennis and Sandra Hallet:
I’ve emailed the editor and gave my contact information if you want to get a hold of me.
I don’t mind the mixing up of the checks. I don’t even mind that these companies cashed checks that weren’t theirs. What I mind is that they are trying to issue a credit –and a delayed one at that– rather than return the money immediately. You overcharged me, now give me my refund… NOW!
@juniper
I am well aware these are two seperate systems doing different things. However the person cashing the check has the responsiblity to do it correctly. I am saying the technology is there and so there is no excuse for illegally cashing a check. Association of pages has nothing to do with reading who the check is made out to
In this case:
1)”I didn’t read the check” is not a reasonablee defense in my eyes
2)’We chose not to invest in available technology to make sure we didn’t commit a crime’ isn’t either
3)Telling this person to bad and giving them a credit sounds a lot like an admission of check fraud.
I’m not saying anythign would actually ever be done about this, but it should.
Let me see if I understand this whole situation especially the comments correctly.
1: If i cash a check with somone elses name on it I goto jail
2: if a corporation does it its an error
3: companies get so much money that they cannot possibly look at every single check.
4: because companies make so much money it is my fault when they commit bank fraud.
Can someone please explain how making too much money is an excuse to cash a check made out to you? At what point is it ok for me to do this.
“”It shouldn’t take two months to get a refund from this error, but there’s really not anything at all that AT&T or Dell can do – they never touched those checks. AT&T and Dell probably did make a report to the lockbox vendor – but yes, it can really take time to get that sorted out.”
Actually, the problem is the law is really strict about what heppens when a check like this is inadvertantly cashed.
And btw, accidently cashing a check not made out to you isn’t a crime. There has to be intent there.
When a check is accidently cashed against the wrong party, it has to go back through the federal reserve system, which is where the hold up is. It’s illegal for us to keep that money, once the error is discovered (then we’d have intent), even if the issuer says it’s okay.
What this means is, we can’t just cut you a check, it HAS to go back through the federal reserve, which takes 2-6wks. Why does it take 2-6weeks when everything else the reserve does takes a day? Not sure, a mystery of gov’t…
@nutrigm:
you mean AT&T not Chase