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Check cleared, fund available?
Old 07-19-2007, 12:46 PM   #1
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Check cleared, fund available?

I'm extremely upset with my bank, Bank of America.

Last Saturday 07/14, I deposited a 10K check. That transaction was marked "pending". On Tuesday 07/17, the "pending" status was removed. At noon the same day, I went to the bank and wired 10K to my brother's account, which he received 2 hours later. So far, so good.

Last night I checked my account, and I got a "pending/holding" status on the 10K check. My account balance went negative, and I have several checks pending that might be deposited at any time.

This morning I went to bank, and they told me the 10K check bounced! How could that happen? Why did they "clear" the check in the first place?

What can I do? I'm looking at a minimum bank charge of $35 for the bounced check, and a possibility of around another $100 for the several checks I wrote last week but are not cashed yet.

Are banks allowed to do this? That is, clear a check that is insufficiently funded? Should my bank be accountable for this?
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Old 07-19-2007, 12:56 PM   #2
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Your only recourse is to close your Stank of America account. That's what I had to do. Their software simply sucks. Watch out because the bank manager may be able to change some things for you, but once the overnight software run is made, it will be back to the same mess you have now. How do I know? Well, I deposited a $100K check and they put a hold on it and then treated it as a $100K withdrawal. I informed them of their error within 3 hours of depositing the check. In the end, I was 6-figures in the red for more than 3 weeks. You can imagine everything that bounced: checks to the PTA, online billpay, checks to the SaveTheAnimals fund, etc, etc.

In the end, BoA paid all the fees associated with 3 weeks of bounces. The manager wrote letters to all the bouncees. So go talk to the manager in person.

In the end they just took way too long to fix it. I switched banks. You should as well.
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Old 07-19-2007, 02:47 PM   #3
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Question: Where did the $10K check that you deposited come from? Even if the check "clears" in the short term, the bank can remove the money if the check bounces in the long term.

My current bank is nice enough to not put any kind of hold or pending on checks that I deposit ... that is, I can use the money right away. But I imagine if any check was not good, they would simply rescind the deposit. I haven't had to deposit a check that wasn't from my employer or from myself, so I have known that all my deposited checks are good. If I had a large check from elsewhere, then I would probably not use the money for 3 or 4 weeks (or longer if the check was from Nigeria). Or I might cash the check in person at the bank where it was written.
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Old 07-19-2007, 02:54 PM   #4
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Watch the movie "Catch Me If You Can" to see how a check (at least in the old
days) can take weeks to finally bounce.
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Old 07-19-2007, 03:08 PM   #5
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Sam....

Federal law says how long they can hold your funds when it is deposited...

I believe it is now 3 days, which is what it looks like...

It can take up to a week for a check to clear (sometimes longer)...

If the check bounces... IT IS ON YOU!!!

What do you think they should do, let you spend money you do not have??

Your recourse is the person / entity that gave you the $10 K check... THEY are the ones to blame...
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Old 07-19-2007, 03:18 PM   #6
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Quote:
Originally Posted by CyclingInvestor View Post
Watch the movie "Catch Me If You Can" to see how a check (at least in the old
days) can take weeks to finally bounce.
Unfortunately for those of us who once lived on the float (the time it took for a check to 'clear'), technology and the Check Clearing for the 21st Century Act (Check 21) has shortened the time considerably.

Why then, you ask, does my bank place a hold on a check when I deposit it? Because they can. The Expedited Funds Availability Act sets a maximum time funds must be made available to you, and some banks use this maximum even though the check may have cleared days earlier.

Sam, find a Credit Union and open an account with them. Bank of America is mostly interested in how much and how often they can charge you a fee for doing business with them.
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Old 07-19-2007, 03:30 PM   #7
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Even if the check "clears" in the short term, the bank can remove the money if the check bounces in the long term.
This is the part that upset me. Shouldn't the bank ensure that the check is ok before clearing it? Isn't that the whole idea of fund availability?
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Old 07-19-2007, 03:33 PM   #8
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What do you think they should do, let you spend money you do not have??

Your recourse is the person / entity that gave you the $10 K check... THEY are the ones to blame...
Easy, Texas Proud.

Yes, everyone knows that the owner of check is the one to blame. But I don't mind waiting for a check to clear. But as it is now, "clear" apparently means nothing.
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Old 07-19-2007, 03:47 PM   #9
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Clearing does in fact mean nothing. But that isn't BofA's fault. Thats the laws fault. BofA has alot of other issues, but this isn't one of them.

There are legal requirements that they must follow and "clear" the check. They are required to release the funds to you in a certain number of days, but a check can "bounce" for much much longer than that. (its been a few years since I worked at an ACH place, but my recollection is 90 days, maybe even 120 under certain circumstances).

No matter how long exactly it is, it is longer than they can hold the funds from you. If you wen't sure of the check you shouldn't have done anything until whomever you got the check from said that the money was gone from their account. If you don't trust that person you should give it atleast 2 weeks before you "clear" the check and use the money for something.

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Old 07-19-2007, 03:48 PM   #10
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Easy, Texas Proud.

Yes, everyone knows that the owner of check is the one to blame. But I don't mind waiting for a check to clear. But as it is now, "clear" apparently means nothing.
No... 'clear' only means that you have availability to the funds, not that the funds are actually there... BofA submitted your check to the clearing agency in your local area... the other bank said "OK" and gave BofA credit for the $10K... and you get the 'clear'... then the other bank looked and said "UT OH", there is either not enough money in the account OR the check is a fraud and tell BofA to give back the money... so BofA come back to you and take it out of your account... If the check was not a fraud, then they should give it back to you and then you can either redeposit it or cash it at the bank it is written from...

As I said.. the fed will not allow the bank to hold the funds until they are 'sure' that they have funds... it just does not work that way anymore...

As mentioned, before they would put a hold for 7 to 10 days for a local check and up to 30 days for out of state checks... and sometimes they were cleared in a few days but the bank did not lift the hold..

NOW... if the check that bounced was written from a BofA account... then you do have a big beef... they should have known right away there was a problem...

You still did not say who wrote the check and why it bounced... but.. I guess that is irrelevent...
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Old 07-19-2007, 03:55 PM   #11
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Sam...

I thought of an example.... Let's say I get a book of your checks and you have gobs of money....

I write many checks all over the place... and the people deposit them.. you have money in the account and everything is hunky dory until you get your statement... you call up the bank and say HEY....

Well, the bank sees that the checks are fraud and can go back to the bank that presented them to your bank and get the money back... well, of course the other bank is going to go into their customers account and take the money out... and as mentioned before it is a good amount of time that this can happen... I do believe though that a corp can only call back a payment after 3 or 7 days... can't remember...


Just to let people know... the banks don't check your signature on the checks... unless you complain...
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Old 07-19-2007, 04:53 PM   #12
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Originally Posted by Texas Proud View Post
I thought of an example.... Let's say I get a book of your checks and you have gobs of money....

I write many checks all over the place... and the people deposit them.. you have money in the account and everything is hunky dory until you get your statement... you call up the bank and say HEY....

Well, the bank sees that the checks are fraud and can go back to the bank that presented them to your bank and get the money back... well, of course the other bank is going to go into their customers account and take the money out... and as mentioned before it is a good amount of time that this can happen...
Good point. I never looked at it from that angle.

Back to my case. I just contacted the owner of the check, and yes, it bounced. The account was about $100 short of 10K. Honest, but costly mistake.
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Old 07-19-2007, 06:03 PM   #13
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My credit union has a hold on checks over 5k so the suggestion to go to a credit union wouldnt work...I think the fed rules leave it up to each institution to decide the hold time....my US bank account holds over 10k...

Seems like my online savings accounts like HSBC, FNBO, etc. havnet held, so I mail into them for larger checks....
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Old 07-19-2007, 06:29 PM   #14
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My US Bank account holds 5 days for 5-10k and 10 days for anything over 10k

Apparently the terrorists aren't smart enough to deposit several checks for $4k. I feel safer already.
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Old 07-19-2007, 09:23 PM   #15
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Good point. I never looked at it from that angle.

Back to my case. I just contacted the owner of the check, and yes, it bounced. The account was about $100 short of 10K. Honest, but costly mistake.
yes... costly mistake... and I will make a suggestion to all... get a overdraft line of credit.. it is FREE if you do not use and and it might save you... I have $2K...

I had opened up an account and had asked for it without know I had... well, my GF took out to much money and I was pissed... the FEES... well, lo and behold the overdraft covered it and I transferred money that same day and was not charged anything... saved my butt...
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