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CHEXcollect
Frequently
Asked Questions
What legal authority gives CHEXcollect the right to recover bounced
checks for a
Merchant?
In 1998 the National Automated Clearinghouse Association (NACHA)
Approved the new banking interim rules that allow a merchant or agent
To represent NSF checks electronically. This permanent rule became
effective on September 15, 1999. This rule is officially known as
Electronic Check Representment (RCK).
Why does this make financial sense for my business?
Since CHEXcollect performs this for you electronically there are
no
redeposit fees to the merchant for resubmitting the check the second
and
third times. Additionally, there are no letters to write or phone
calls to make to the check writer in attempts to collect the bad check.
What types of checks can be represented?
Checks that indicate on the face that the check was returned due
to "Not
Sufficient Funds", "NSF", "Uncollected Funds",
or similar language.
How many times can the merchant represent an item?
A total of three (3) presentments are allowed. The RCK entry can
be sent
twice if there was only one previous physical presentment, one time
if there were two physical presentments.
Is there a dollar amount on checks submitted for Representment?
Yes, checks with a face value of $2500 or less may be processed.
What must the merchant do to inform the customer?
The merchant must notify the customer that their return item may
be
collected electronically if the check is returned for insufficient
or
uncollected funds. You will be provided with special decals which
must
Be posted at each register location. If you send out monthly billing
statements then the language should be included there as well.
What items are not eligible for Representment?
- Drafts drawn on the Treasury of the United States, a Federal Reserve
Bank, a Federal Home Loan Bank, or state/local government.
- Postal Service Money Orders
- Items not payable in U.S. currency
- Items indicating on its face that it was returned for reasons other
than "Non Sufficient Funds", "NSF" or "Uncollected
Funds"
- Checks over $2500
- Unsigned demand drafts
After a check is determined to be NSF, who retains the paper
check when RCK is
initiated?
The paper check is retained by CHEXcollect. Should you desire to
receive
the physical check back then you will have this option at signup at
a cost
Of $1.50 per check. If you do not select this option your monthly
bank
Statement will include the payee's name, "Redepcheck" in
the description
and the check amount.
If a check bounces will my bank charge be a bounced check fee?
Yes, almost every bank will charge the merchant a fee for NSF checks.
Check with your own bank what they regularly charge.
What happens if the check writer pays the merchant directly for
the bounced check
during the 60 day Representment period?
The merchant can keep those funds and should notify CHEXcollect
Immediately that the check writer has made good. The merchant will
still be liable for the NSF fee (usually $25.00) so he should collect
this from the check writer.
What type of report will I receive from CHEXcollect?
You will receive via email or fax a detailed report for each represented
check. As an option, you may select to monitor all your NSF check
activity online for $15.00 per month.
How do I signup for the CHEXcollect program?
Signing up is very easy. Simply print out the Merchant Application
and
Bank Release Authorization. Fill in both completely and sign where
noted.
Fax the completed Merchant Application along with a voided business
check to 215-489-7880. In addition, you must deliver the Bank Release
Authorization to the Commercial Accounts Representative at your business
bank.
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