Check 21: Yay or Nay?

[sarah]

Have you heard of this?
http://www.fdic.gov/news/news/financ...4/fil5404.html


From a gov't website:

The Check Clearing for the 21st Century Act (Check 21) was signed into law on October 28, 2003, and will become effective on October 28, 2004. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. The law facilitates check truncation by creating a new negotiable instrument called a substitute check, which would permit banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks.

A substitute check would be the legal equivalent of the original check and would include all the information contained on the original check. The law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the act to create substitute checks.

It seems to me like this could get out of control. Hmm.

[JeepGal]

coming from the banking world...basically it requires copies of the checks provided by the bank to be accepted as legal proof that the check were written. Up until this, if your bank truncated your checks (provided check storage), and you needed proof of payment for legal reasons. The copy was not sufficient, and you were out of luck.

This protects you and allows the bank to continue to offer this "service". I used to hate this service, wanting my original checks back, though I cant remember the last time I actually needed a check to prove payment. And to be honest with you, most people wouldnt be able to locate a check they wrote 5 years ago anyway. This now makes it easier for you AND the bank .

Tam

[sarah]

But if a bank/person/etc will accept a digital copy of the check .... It seems like in time thieves will figure out how to create a digital copy, or an altered digital copy? At least with a paper check, they would have to steal my checkbook to start writing checks, but I guess you can get checks printed with anyone's name on them nowadays. I guess we'll never win. LOL

[king4wd]

This looks like an extra layer in the paper trial of check processing. When we recently refinanced, we needed copies of two old checks to prove that items on our credit report had actually been paid. Any extra available information banks could refernce that way would help reduce those type of errors.

[mikeythefireman]

Originally posted by sarah
But if a bank/person/etc will accept a digital copy of the check .... It seems like in time thieves will figure out how to create a digital copy, or an altered digital copy? At least with a paper check, they would have to steal my checkbook to start writing checks, but I guess you can get checks printed with anyone's name on them nowadays. I guess we'll never win. LOL

I don't know how much easier it makes it for the bad guys. All they need to access your account is the number and some vital statistics about you, which they can get using your account number as an access code. You got no really good way to keep them outta your house, you just have to have alarms in place to let you know when they're there.