Check 21 and Substitute Checks: Consumer Rights and Responsibilities
October 13, 2008
A federal law called Check 21 went into effect on October 28, 2004. This law was designed to make it easier for banks to process check transactions. It made this process faster and easier by allowing banks to process checking transactions using copies of checks.
This process involves the use of “substitute checks.” Substitute checks are paper copies of the front and back of the original check.
Some banks will send their customers copies of these substituted checks along with their monthly checking account statements. If a consumer finds a problem or error with a substituted check, the Check 21 law provides a special procedure that permits the consumer to ask for a refund called an “expedited recredit.”
If you find a problem with a substitute check, you should contact your bank no later than 40 days from the date of your monthly statement or from the date your bank gave you a copy of the substitute check. Tell your bank you are requesting an “expedited recredit.”
But, you may have other protections from fraudulent checking transactions even if more than 40 days have elapsed. Contact an attorney for additional information.
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