What You Should Know About Electronic Check Conversion

By Susan M. Keenan

Electronic check conversion is no longer something that might happen. It’s here now, and it's starting to gain momentum as merchants make the switch to this technology. You might think you know what it is, but do you know what it means for you and for your financial accounts?

What is an electronic check conversion?
An electronic check conversion relies on information that is extracted from a source, your check, to make a transaction. The information used includes the check number, the number of your account, and the number the bank uses as its identifier.

How is an electronic conversion different from using a check?
Since electronic check conversion is typically processed much faster than a check, the monetary funds need to be in your account at the time of the payment. Moreover, with electronic check conversion, the consumer has the right to request an investigation by their financial institution when an error has occurred.

How do I know if an electronic check conversion will be used instead of my check being processed?
Federal law dictates that consumers be given notice when an electronic check conversion will occur rather than a check being processed. At stores, a posted notice may be used or the consumer may be asked to sign a statement.

Since my check isn’t actually being used, can I use it again?
Simply put, no. Once a check has been used, even for an electronic check conversion, it cannot be used again.

What if I don’t want to use my check for an electronic check conversion?
If you don’t want to use your check for an electronic check conversion, then you will probably have to make another method of payment, either by credit card, cash, or debit card.

What are my rights concerning electronic check conversions? Consumers have the right to be told that the information on their check will be used for an electronic check conversion. Additionally, they have the right to be informed of any additional fees they will be charged in the event that insufficient funds exist when an electronic check conversion takes place.

Consumers also have the right to a receipt with detailed information from any merchant who chooses to use electronic check conversion. Along the same lines, consumers have the right to see this information posted in their statements from their banks or financial institution. Finally, consumers have the right to request an investigation by their bank when an error occurs.

What if I have a problem or a question about a particular electronic check conversion? What do I do?
If you have a problem or a question about a particular electronic check conversion, contact your bank or financial institution. In fact, it is a wise idea to contact your state’s consumer protection agency to find out the laws in your state governing electronic check conversions.

Where do I file a complaint about someone that I paid by electronic check conversion?
If you need to file a complaint about someone that you paid by electronic check conversion, contact the FTC or Federal Trade Commission.

Important things to remember when using electronic check conversion:

• Be certain that you have sufficient funds in your account to cover the amount of the electronic check conversion.
• If using an electronic check conversion to pay for a purchase at a store, get a receipt.
• Match the amount on the receipt with the amount of the purchase.
• When using electronic check conversion at a store, make sure that your check has been voided and returned to you.
• Go over your statement from your bank or financial institution for accuracy.
• Contact your bank or financial institution immediately should you notice any discrepancies in your statement.

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