Q:
What is Electronic Check Representment (RCK)?
A:
RCK refers to represented
check entries or the process of resubmitting nonsufficient
funds (NSF) checks electronically through the Automated Clearing
House (ACH) Network.
Q:
When was RCK Approved?
A:
National Automated Clearinghouse Association (NACHA)
approved the new banking interim rules that allow a merchant
or agent to represent NSF checks electronically in 1998. The
permanent rule became effective on September 15, 1999.
Q:
How can Merchant's Benefit from RCK?
A:
Electronic Check Representment allows the merchant or agent
to time the debit of the check writer's account. This alone
can result in a substantial increase in recovery rates.
Q:
Are There Cost Savings to the Merchant?
A:
Yes, since everything is electronic, there are no redeposit
fees charged to the merchant for resubmitting the checks electronically
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.
Q:
What can a Merchant Expect for Improvement of Recovery
Rates with Electronic Representment?
A:
Increases in collection rates from 50%-85% over traditional
collection methods have been reported by merchants using RCK.
Q:
What Legal Regulations and Guidelines Apply to RCK?
A:
RCK entries are subject to the applicable NACHA Operating
Rules, Uniform Commercial Codes (UCC) and Regulation CC. However,
RCK transactions are originated by check and are therefore
exempt from the provisions of the Electronic Funds Transfer
Act and Regulation E.
Q:
What Types of Checks can be Represented?
A:
Checks that indicate on the face that the check was returned
due to "Not Sufficient Funds", "NSF" or "Uncollected Funds"
or comparable language.
Q:
How Many Times can the Merchant Represent an Item?
A:
A total of three (3) presentments are allowed. The RCK entry
can be sent twice if there was only one previous physical
presentment, but only one time if there were two physical
presentments.
Q:
Is There a Dollar Limit on Checks Submitted for Representment?
A:
Yes, checks with a face value of $2500 or less may be processed.
Q:
What Must the Merchant do to Inform the Customer?
A:
The merchant must notify the customer
that their return item may be collected electronically if
the check is returned for insufficient or uncollected funds.
Notice should be contained on a sign
at the point-of-sale, a receipt or on monthly billing
statements.
Q:
Is There a Time Limit on Checks that can be Represented?
A:
Yes,
each RCK entry has a time limit of 180 days from the date
of the check.
Q:
What Items are not Eligible for Representment?
A:
The following items are not eligible:
- Drafts
drawn on the Treasury of the United States, a Federal Reserve
Bank, a Federal Home Loan Bank, or state/local governments
- 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.
Q:
Is the Merchant Allowed to Charge the Check Writer a Fee
for RCK Processing?
A:
Merchant
must notify customer about representment at point-of-sale. A
collection fee may not be added to the amount of the RCK entry,
it should be submitted as a separate transactions.
Q:
After a Check is Determined to be NSF, who Retains the Paper
Check when RCK is Initiated?
A:
The
paper check is retained by the merchant or his agent. Copies
can be requested from the merchant or agent.
Q:
How do I, as a Merchant, sign up for RCK?
A:
Contact Electric Checks toll free at 1-877-258-1450 or use our
on-line forms.
Q:
Will I the Customer, have to Pay a Fee to My Bank for the
First and Second Representment?
A:
Normal
NSF check fees are charged by financial institutions. The merchant
is also allowed to charge a service fee for an NSF check.
Q:
Will I Receive my Paper Check in my Monthly Bank Statement?
A:
No,
the check is retained by the company collecting the check electronically
or returned to the merchant. Your monthly bank statement will
include the payee's name, "Redepcheck" in the description and
the check amount.
Q:
What if I was not Notified of the RCK Process?
A:
You
may sign an affidavit with your financial institution that you
did not receive notice. Your account will be credited.
Q:
Who can Electronically Debit my Account for an NSF Check?
A:
Merchants,
billers and financial institutions have the option of debiting
your account electronically for checks that have been returned.
However, they must notify you prior about this procedure.
Q:
Can I Decide how the NSF is Represented?
A:
No,
the merchant, biller or financial institution can represent
the paper check or represent it electronically.
Q:
Do you 200 or more NSF per month?
A:
Click
here to view our "What is Centralized Returns" document.
