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Like a lot of other things these days, share drafts / checks are going cyber!
The next time you pay for something with a check /draft the store may ask for
your authorization to convert your check/draft into an electronic funds
transfer. If you agree, your account will be electronically debited for the
amount of your check and your check will not be processed.
Merchants may also electronically re-present checks/drafts returned because
of insufficient or uncollected funds. Any returned check fees the merchant
charges may be electronically debited from your account as well. The merchant
doesn’t need to get your written authorization to electronically re-present a
returned check or to electronically debit your account for returned check fees.
If the merchant posts a notice or tells you that your check will be
electronically re-presented and fees electronically debited and you go ahead and
complete the transaction with check/draft, you are considered to have given your
authorization.
Finally, in March of 2002 a pilot program allowing merchants that receive
check/draft payments by mail to electronically process these check/drafts will
wrap up and the service will become widely available to merchants. If you pay
bills by mailing a check/draft to the merchant, that merchant may soon be
informing you that your check/draft will be electronically debited from your
account. If you do not contact the merchant and object to the electronic
processing of your check/draft, all future payments you send will also be
debited electronically.
It is important you understand that electronically checks/drafts processed
clear much faster on your account than checks processed physically. Often these
checks/drafts clear by the morning after the day you issue the check/draft,
sometimes even sooner than that. This means that you have very little
"float time". Also, you may not be able to stop payment on
checks/drafts electronically processed because there is not enough time to tell
us before the check/draft clears your account.
Except for electronically re-presented checks/drafts, the electronically
processed checks/drafts discussed above are subject to the Federal Reserve Board’s
Regulation E and the Electronic Funds Availability (EFT) Disclosure and
Agreement we gave you when you opened your account. Although electronically
re-presented checks/drafts are not subject to Regulation E or our EFT Disclosure
and Agreement, the fees are subject to Regulation E and our disclosure and
agreement. If you have questions about these new kinds of
"cyber-checks/drafts" or obtain a current copy of our EFT Disclosure
and Agreement please contact us.
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