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Frequently asked questions from our customers.
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What is electronic check re-presentment?
Electronic check re-presentment is the conversion of non-sufficient funds and uncollected checks into electronic items. These items are then sent through the Automated Clearing House network for collection.
Can a bad check fee be charged to the NSF check writer?
Yes, a bad check fee can be charged and processed electronically. However, certain guidelines must be followed in order to collect the fee. This involves either the use of legal notices of your check acceptance policy at the point of sale or monthly invoices, order forms and catalogs imprinted with the same legal notices of your check acceptance policy. We provide the Client with the necessary language and signs to comply with these regulations.
What has been the consumer's reaction to electronic check re-presentment?
Very favorable. It is less embarrassing. It restores the customer's check writing privileges quickly with no need for them to bring cash or money orders to the merchant. A convenience for both the merchant and customer.
How are the NSF checks sent to the local processor?
The merchant signs a Release Form that is sent to their bank instructing the bank to mail all returned checks to our processing center prior to re-depositing the NSF checks.
Is the use of paper checks decreasing?
Quite the contrary. Note the following facts about check usage in the United States:- About 50 billion checks are written annually for retail payment by consumers and businesses in the US, totaling about $48 trillion in payments according to a Federal Reserve Bank study.
- The Federal Reserve Bank expects the volume of checks to increase by 1-2 percent each year for the next 6 years.
- It is projected that the number of checks written annually will rise by 2-4% through the year 2020. At the same time, more than 1.7 million bad checks will enter the payment system daily.
 What is the National Automated Clearing House Association (NACHA)?
NACHA, located in Herndon, Virginia, represents more than 13,000 financial institutions through its 35 regional ACH associations, six counsels and corporate Affiliate Membership program. A leader in the payments industry, NACHA develops operating rules for the ACH network and for emerging electronic payment solutions in the areas of Internet commerce, bill payment and presentment, financial EDI, cross border transactions, electronic checks, and electronic benefits transfer. NACHA produces marketing and technical publications and provides extensive education services, including major conferences and seminars.
What about accounts or checks that can't be collected?
Certain checks that can't be collected electronically are sent to our Hard Money department, where methods customarily used in collections such as phone calls and letters, are employed. We provide a 305 day collection program for a percentage of the face amount of the check. We can continue collection attempts for an additional 2 years at the client's request. If the check is not collected in this subsequent 2 year period we will return the check along with copies of all communication including certified letters and skip tracing information in time for you to seek legal remedies if you so desire.
What are the costs of legal collection?
The cost of legal collection varies, most law firms that specialize in collection services obtain their fee by charging 1/3 the recovered face amount plus legal fees, which are added into the judgment and award. Therefore, you may not pay anything.
What are the benefits of electronic re-presentment?
There are the major benefits.- Lower Collection Costs - Most banks charge $2-$4 to redeposit a NSF check, and $5-$10 per redeposited NSF check that returns a second time. Our electronic re-presentment program does not charge for NSF re-presentment.
- Dramatic Improvement in Collection Rates - With collection being done electronically, the recovery rate is higher. The national Automated Clearing House Association reports increases in collection rates by as much as 50% compared to traditional collection methods. Recovery can be as high as 89%.
- Faster deposit to your account - As an industry standard, it takes approximately 7 to 10 business days from the time the information is received by the ACH to procure payment. This period allows time for the check to be completely processed and payment paid on a monthly basis to the merchant. Traditional collection methods take much longer to recover your NSF items compared to using Electronic Check re-presentment.
- Timing the NSF check re-presentment - We can time your re-presentment to hit the bank when funds are available. This provides a greater chance of collection. Traditional methods do not provide the ability to time the collection.
- Verification of Available Funds - We contact the bad check writer's bank to verify the availability of funds to increase our ability to recover the NSF checks.
How soon is the merchant paid once the check is recovered?
As an industry standard, it takes approximately 7 to 10 business days from the time the information is received by the ACH to obtain payment. This period allows time for the check to be completely processed and payment information received. Transactions that are recovered are then paid on a monthly basis to the merchant.
What is the difference between processing these items electronically vs the old way?
Currently, returned checks that are to be re-presented must be physically sent through the check clearing system in order to be collected. NACHA rules allow the re-presentment to take place through the ACH network. This allows an increase in speed of re-presentment and time but a reduction of cost to the merchant. Depending on the number of returned items a merchant receives annually, the impact to the bottom line could be significant.
Why shouldn't the merchant simply allow the bank to re-deposit the NSF checks?
Banks can charge as much as $5 to $10 if the NSF check is returned unpaid a second time. With ChekXcept there is no charge to redeposit the check electronically and no charge each time it comes back unpaid. Furthermore, the electronic re-presentment is far more likely to be successful due to the speed and timing of the re-presentment. ChekXcept can redeposit the NSF check up to three times in some cases, while the bank can only redeposit the check once. If the NSF check is unpaid at the bank after the redeposit, the bank sends the check to the merchant who must collect it personally. There are other options available to you with ChekXcept.
Is electronic check re-presentment legal?
NACHA announced on March 10, 1998 that its Board of Directors approved a "rule" for the electronic collection of checks returned for NSF can now be collected through the ACH network, which allows financial institutions to exchange payments on behalf of business customers and consumers. NACHA announced the new rule at its PAYMENT 98 conference in Seattle. The Check Recovery program rule requires businesses who plan to collect returned checks electronically to notify check writers, at the point of sale or on monthly bills, in a manner similar to notices currently required for collections fees.
How many times can a NSF check be submitted for processing?
NSF items can be re-presented 2 times electronically. In some cases, the NSF times may be entered up to 3 times. We monitor the account and immediately recover the NSF check as soon as the money is deposited into the check writer's account.
How will electronic check collections affect my accounting procedures?
We act as a seamless extension of your accounting department. Providing a streamlining of all the information your accounting department needs is part of our Hallmark Service. Clients will receive reports needed to allow their accountants to know the status of every check.
What about contracts and obligations?
You are not obligated to a long-term contract. In fact, our contract states that you may discontinue our service at anytime with in the first 90 days. After that, our contract automatically renews every 12 months unless you cancel via written notice 30 days prior to the annual expiration date. We find this works best for everyone.
— ChekXcept is a Licensed Processing Center —
— for Returned Checks —
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