Float A Check…Not Anymore!

Consumers need to be aware of this since this could save you money or it could cost you money in the future. Retailers can now process your personal checks electronically so they now clear much faster than in the past. Its call B.O.C. and it stands for “Back Office Conversion.”

It’s based off the ACH network, which is used for payroll direct deposit transactions. Personal checks are now scanned and converted into an electronic format that can be transferred to a bank via phone lines and processed quickly. This transfer is not as quick as a debit transaction but if you pay by check today you can count on it clearing the next business day. For the most part the process will be transparent to the consumer however it’s good to know what your rights are and how this works.

Only personal and business checks under the amount of $25,000 can be run through the B.O.C. and merchants are required by the NACHA (the nonprofit Electronic Payments Association that develops business practices for electronic payments) to disclose to the customer their checks are going to be electronically converted and processed.

Store merchants are required to prominently display that they use electronic check processing at the register and on customer receipts. For businesses like credit card companies and mortgage lenders or any other companies you issue checks to, they too must notify you on the billing statement or on a separate enclosure included with your bill.

If you have paid a bill by mail and that payment is going to be processed as a B.O.C. transaction it is required by the NACHA that the business securely stores the check until it is destroyed and that the business ensures the paper check will not be presented for payment after it has been electronically converted.
How does this affect you?

It might not unless you are one of the many people who are use to floating a payment a few days knowing payday is a day or two away. Today, it might be wise to ensure you have the money in your account before you write a check or you risk extra transaction fees from your bank.

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