Why does it matter? What will happen to me?
When you present a check to a Financial Institution (FI) to cash or deposit, the FI processes the check through the Federal Reserve System. The vast majority of the time, the check moves through the system and the check is honored by the FI in which it was drawn. Occasionally the check is not honored, there are many reasons why - fraud and insufficient funds are the two most common.
As the person that presented the check to the FI to be cashed or deposited, you are responsible for the funds that check represents. Should a check not be honored by the FI on which it was drawn, again, you remain responsible. It has been estimated that the annual losses due to check fraud are in the billions. See www.ckfraud.org/ckfraud.html for more information.
To protect our members at SPFCU, we may place holds on checks which are presented for deposit. A check hold allows time for your check to be processed through the Federal Reserve System. We take check holds very seriously; our Member Service Representatives (MSR's) are trained to look for clues that a check may not be valid.
Following is a brief list of items our MSR's may ask of you or look at when accepting checks for either cash and/or deposit:
- Is the check a large dollar amount?
- Is the check from a well known place? Who is the check from?
- Where is the check drawn from?
- Was this a check you were expecting?
- Is this a credit card check?
- Where is the cashier's check drawn from? Does the check look altered?
Based on the answer to any one of these questions will determine whether we place a hold on a check. There are few situations that are more difficult than to inform a member that a check they deposited; and possibly spent, has been returned to us unpaid. It is for your protection that we look at and question the check at times to give you the best member service possible; for we are looking out for you, our member!
Shana Micheels, Compliance/Human Resources