Frequently Asked Questions:
1. Does the processing center call the banks first to verify funds
before creating an ACH transaction for Electronic Check Recovery?
Yes, but only after it has been run through the system a second
time via ACH. If the check is returned after second presentation, the
processing center will call and verify funds from that point forward
before attempting to ACH the account a third and final time. Also, they
wait and send the fee through only after the check amount is verified as
being available. This avoids having both items being returned and the
customer charged for it.
2. How long does Electronic Check Recovery work an NSF check before it
is determined to be uncollectable?
By regulation there can be three attempts to collect an amount
due, including the attempts made with the original paper check. So if it
is sent to the processing center after the first presentation, the
processing center then has two attempts left to recover the funds
electronically through the ACH process.
When checks are received from a merchant's bank, the
processing center automatically originates an ACH transaction to debit the
check writer's account. If the ACH transaction is returned NSF, the
processing center will start calling to verify funds before originating
another transaction (the last attempt).
3. If the bank sends a return NSF check after first presentation to
Electronic Check Recovery, how do they notify the merchant?
The Bank Release Authorization states the request for a duplicate
copy of the Returned Item Notice to be sent to the merchant. Of course
the merchant will receive information on checks received by the
processing center either by Internet or by a mailed monthly report.
4. What do I do about restaurants that deliver and the Electronic Check
When delivering merchandise or food, Electronic Check Recovery
would need signed authorization to collect the fee on returned items.
There are many ways to get this signed authorization. A good example is
the rubber stamp. The merchant can use a self inking rubber stamp to
stamp the front of the customer's check that says: "I understand &
authorize all dishonored checks plus a processing fee of $XX.XX to be
electronically debited from my account.
The delivery person has the check writer sign and the delivery
person returns to the merchant with the signature needed on the check