Current Newsletter
Collection & Credit Insights
November 2004
Check 21 - Check Clearing for the 21st Century Act
This law was signed on October 28th 2003 and went into effect on October 28th 2004. If you haven’t heard of “Check 21”, you will shortly, especially if you have any kind of bank account.
The purpose of this law is to reduce the need to transport paper checks. With the increased price of gasoline and the unfortunate potential for interruption of air traffic, the transportation of paper checks has become increasingly more challenging.
Check 21 creates a way for banks to pass electronic images of checks to each other instead of paper checks, but the new law does not require banks to use this new mechanism. If a bank prefers a paper document, Check 21 allows for a new negotiable instrument that will be referred to as a “substitute check”. These substitute checks will be similar in size to regular checks, but will be a reduced image of the front and back of the original check. The substitute check will include the following statement “This is a legal copy of your check. You can use it the same way you would use the original check”.
If you currently receive your cancelled checks back on your personal or business accounts, it is possible that you may still receive them; it will be each specific bank’s decision. If your bank determines that it will begin to send electronic images of your checks, they must notify you of this change.
Check 21 affects the collection industry in a couple of small but important areas. First of all, banks will be able to process many more checks electronically. As a result checks will reach the issuing bank sooner and will be cashed sooner. It will be important for consumers to make sure that there are funds in the account to cover the checks they write before they write them. Gone are the days of having 2 or 3 days before your check will be cashed. For our industry, or any industry that accepts checks, there have been some mumblings to expect more NSF checks in the beginning until consumers begin to understand that the funds can come from their accounts immediately instead of in a couple of days.
Secondly, this new law states that you can use a substitute check as proof of payment because it is the same as the original check. Even the IRS will accept a substitute check as proof. Businesses will need to learn to look for the legal statement on a substitute check so that they aren’t accepting just any copy of a check.
You will be hearing more and more about Check 21 throughout the month of November. Of course, there are many websites that will give you lists of pros and cons, but if you are interested in reading the Act as it is from the government (the horses mouth) or want to read the FAQ that the government has available on their website, then go to the Federal Reserve Board at http://www.federalreserve.gov/paymentsystems/truncation/
Linda Underwood
Administrative Manager
PLEASE NOTE THAT OUR JACKSON OFFICE AND ADRIAN OFFICE HAVE MERGED
TO OUR ANN ARBOR OFFICE.
Upcoming Events
Credit Professionals of AA
November 9, 2004
Recovery Skills Seminar
March 16, 2005
Welcome to Our New Clients
- Troy Auto Care
- Lois Godel
- D&S Delivery Service
- Southeast Michigan Surgical Hospital
- Kilbuck Townhouses
- Russell Square
- Washington Arms
- City of Wayne
Phone Numbers
Client/Sales questions
800-710-4821
Mortgage Dept.
800-684-2738
Customers to pay bills
800-741-6955
Report payments
734-665-6173
Fair and Accurate Credit Transactions Act - FACTA
On December 4, 2003, President George W. Bush signed into law the Fair and Accurate Credit Transactions (FACT) Act. With a few minor exceptions, this law will go into effect on December 1, 2004.
We would like to urge all our customers to make sure their compliance departments and legal counsel have read, understand and implemented any required changes by the December 1, 2004 deadline.
All companies are affected in one way or another; the FACT Act even requires those accepting electronic credit card or debit card transactions to get new equipment if, at the point of sale, their current equipment prints out an entire account number.
This law has changes that affect the Credit Reporting Repositories, now known as the new buzz word, “603(p) agencies”, as well as Mortgage Lenders, Credit Reselling Agencies, Financial Institutions, Collection Agencies, Data Furnishers, all Credit Grantors and anyone that uses an in-house scoring system.
Also, if you are a data furnisher to any one or all three of the National Credit Reporting Agencies (CRA’s), Trans Union, Equifax, and/or Experian, make sure your compliance department and legal counsel have talked with your CRA representative as there are many changes forthcoming from those agencies as well.
We have been informed that the CRA’s may no longer accept data from you if you are not using their designated electronic system of handling consumer disputed items.
If you have any questions, please feel free to call us at 1-800-MTG-CRDT (800-684-2738) or to read the complete FACTA document, go to www.ftc.gov.
Is There Such a Thing As Free Lunch?
There is nearly nothing for free in this world. Everything you use or consume (other than fresh air- and even that can be hard to find these days) has to be produced or at least brought to you by someone. And that someone usually doesn’t do that gratuitously.
Well, the Ann Arbor Credit Bureau wants to challenge all that. We want to buy your office lunch. That’s right, you could be the lucky recipient for lunch to be brought to you by the bureau for your office. All you need to do is talk to the businesses you work with, maybe it’s a referring practice or a vendor you purchase from. Simply advise them to contact us for professional collection follow-up. If you turn them on to the Credit Bureau and they list business with us, the lunch is yours. No strings attached. We, like any business, love referrals, but we wanted to give you something for your efforts. Watch out… lunch is on the way and it is Free!
This will be an ongoing referral program so spread the Ann Arbor Credit Bureau name. For further details contact one of our professional sales representatives, 800-710-4821.
High Payment of the Month!
Our high payment of the month honors go to Page. She collected $2660.00 from a local medical facility. Congratulations Page and to all the collectors for the hard work they do.
Credit Professionals of Ann Arbor meeting
Credit Professionals of Ann Arbor will meet at Weber’s Inn, Tuesday, Nov. 9, 2004 from 7:30am to 9:00am. The featured speaker will be Pam Manor. The topic of discussion will be “Every Business is Subject to Fraud.” Pam will discuss what internal measures can be taken by businesses to prevent fraud.
Meeting fee is $10.00. Please contact Rebecca Burk at 734-994-6928 for reservations.
Welcome!
We want to welcome Yelena Griffiths & Stacy Corn to our "Credit Bureau Family". Yelena will be working as our new front office support person and Stacie as our legal support person.
Welcome Yelena and Stacie!!
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