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Dan Lanciani

In article , writes:
| On 13 May 2009 04:07:13 GMT, ddl@danlan.*com (Dan Lanciani) wrote:
|
| | There are plenty of check cashing places that will cash any check that
| | clears the "instant EFT" machine they have. They just want a piece of
| | the action.
|
| That would be annoying since I don't authorize any third-party EFT debits
| on my account; however, I think there would be time to send the 1099 while
| I decided whether to dispute the debit.

|
|
| This looks like a check to your bank. I am not sure how many places
| have it but they are getting a lot more popular here in Florida.
| The machine uses the routing transit information off the check and
| processes it immediately.

You are likely talking about ACH conversion. This is not the same as a
check and is not (in theory) allowed without the permission of the customer
whose account is to be debited. Banks seem to conflate various types of
check truncation but it is still possible for you to tell the difference.
Under the Check Clearing for the 21st Century Act the bank must supply upon
request a legal substitute check which includes an image of the back and
front and verbiage indicating that the copy is legally equivalent to the
original for all purposes. (Obviously if they _have_ the original they can
give you that instead.) If the bank cannot supply the substitute check
then the transaction was probably not processed as a check.

| It is not a debit card. It is a check, any
| check. The first place I saw it in action was a brick yard.

Here you are likely talking about point-of-sale ACH truncation. The
merchant posts a notice explaining that your check will provide the
account and routing information for them to make an electronic withdrawal
from your account. If you hand them a check you agree to the process.
This is explicitly allowed by the NACHA rules but your bank certainly
knows the difference between this and actually clearing the check. (As
bad as my own banks are I can still see the difference on the statement,
but that may be because I have declined all their generous offers to stop
sending me at least images of my canceled checks.) Point-of-sale
truncation is not the same as taking an existing check to a third-party
check cashing service where the service has no way to know that the
original maker of the check gave even implicit permission for the
conversion.

Note well that your rights and responsibilities wrt a check (a negotiable
instrument) and an electronic debit are completely different. In particular
the time you have to dispute a charge is different as in theory is the
burden of proof.

| Considering how much money it costs for a bank to handle the physical
| document (a check) I bet this becomes a lot more popular.

That was the whole point of the Check21 legislation. It allows checks
to be processed electronically while maintaining their character as
negotiable instruments and providing images so you can argue about the
signature. ACH check-to-debit conversion existed before Check21 and
is better for everyone except the consumer making the payment. There
is tons of information on Check21 to Google if you care about the
distinction...

Dan Lanciani
ddl@danlan.*com