Bank cashed post-dated check early! - Mothering Forums

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#1 of 25 Old 11-04-2010, 05:06 PM - Thread Starter
 
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Gaaah!

I wrote a check for car insurance, which is due on the 7th. I dated the check 11/07/10. For some reason, the funds were taken out of my account on the 2nd, and because tomorrow is payday (and I budget everything in such a way that I don't keep much extra in checking), it overdrew my account.

The bank says they don't release the funds til the date on the check, but they're considered "unavailable" for me to use, which is why they were taken out of my account.

Thankfully, I have a LOC attached to my account, so there are no fees or anything from this. But I'd been considering closing the LOC, since we're trying to avoid using credit of any kind.

Is what the bank did legal? Or should I throw a fit?

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#2 of 25 Old 11-04-2010, 05:12 PM
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Unfortunately, I think it is legal. It's usually the responsibility of the payee to hold the check until the date on the check. If they don't, the bank will usually pay out. I work in a company that receives MANY renewal payments daily, and it's not possible to catch every post-dated check that comes in. Sometimes it happens, but more often than not, it's missed.

It's a huge pain but the best thing to do is date the check the day it's due, and get it into the mail like only 3 days before it's due. IME, if payment is postmarked a reasonable amt of time before the due date, the company will count the pmt as "on time." But this helps ensure that it doesnt get there too early either.

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#3 of 25 Old 11-04-2010, 05:17 PM
 
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I just looked this up because I thought it was illegal for *you* to post-date a check. Technically it's not but it is illegal to write a check for which you do not have the funds:

http://www.bankingquestions.com/chec...ostdating.html

"Delivering postdated checks is not wise, however. That's because it's legal for your bank to pay a check even when it's postdated, unless you've taken the extra step to contact the bank and put it on notice about the postdated check, and requested the bank not to pay it until its date."

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#4 of 25 Old 11-04-2010, 05:18 PM
 
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It's legal. It's actually illegal to write a check if you do not have the funds to cover it.

http://www.bankingquestions.com/chec...ostdating.html

But apparently you can call your bank and put them on notice:
Quote:
Concerning your bank paying a postdated check before its time, UCC Subsection 4-401 states that "a bank may honor an otherwise properly payable postdated check before its date unless the customer has given the bank reasonable notice of the postdating." The notice of postdating is simply a means by which you can place the bank on formal notice that you've written a postdated check, and it orders the bank not to pay the check before the date written thereon. If, after reasonable notification, the bank makes payment before the pay date on the check, it could be held liable for losses occurring due to its actions.
Source: http://www.finweb.com/banking-credit...ed-checks.html

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#5 of 25 Old 11-04-2010, 05:20 PM
 
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Post-dating means nothing. The bank is not legally responsible to hold your check until then (at least in this state). If you write a check, regardless of what date you put on it, the money needs to be available.

Honestly, i'd take it up w your insurance company rather than your bank, and see if they'll agree to hold the check. But dont be surprised if they say no. They are under no obligation to do so, and it does create an acctng nightmare.

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#6 of 25 Old 11-04-2010, 05:20 PM
 
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Sorry, the bank has no responsibility for holding a check until a post date. I didn't realize any of them even claimed they would do that...

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#7 of 25 Old 11-04-2010, 05:54 PM
 
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I agree w/the others - and think it's wise to never count on post-dating a check as a means to 'float' it.

What you can do, is pay your car insurance online the day it's due, or set up automatic payments for that date. Either through bill-pay or directly from the insurance company's web site.

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#8 of 25 Old 11-04-2010, 05:58 PM
 
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I worked as a teller on the weekends for a while. They told me "there's no such thing as a post-dated check". If you wrote it (and it's not past the number of days they have to cash it), we were to cash it.

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#9 of 25 Old 11-04-2010, 06:16 PM
 
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Quote:
Originally Posted by heatherdeg View Post
I worked as a teller on the weekends for a while. They told me "there's no such thing as a post-dated check". If you wrote it (and it's not past the number of days they have to cash it), we were to cash it.
I was told the same thing when I worked as a teller.

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#10 of 25 Old 11-04-2010, 06:28 PM
 
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You could just do an automatic withdrawal so that you don't have to worry about post-dating and overdrawn funds? I rarely send checks to anyone anymore.

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#11 of 25 Old 11-04-2010, 06:46 PM
 
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Quote:
Originally Posted by heatherdeg View Post
I worked as a teller on the weekends for a while. They told me "there's no such thing as a post-dated check". If you wrote it (and it's not past the number of days they have to cash it), we were to cash it.
Quote:
Originally Posted by lyterae View Post
I was told the same thing when I worked as a teller.
And me, as well. The only thing we check in regards to dates is that it isn't more than six months old. It can be dated anything in the future, means nothing.

I am sorry that you had to go through this mess, though. Same thing happened to a coworker of mine (fellow bank teller, ha) not because she thought the bank would hold it, but because she hadn't planned on mailing it for a few more days. Her grandma found the ready-to-mail envelope and mailed it, the recipient cashed the check, and my friend's accounts weren't back to OK for weeks and weeks. It happens.

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#12 of 25 Old 11-04-2010, 07:25 PM - Thread Starter
 
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Sounds like I'm an idiot!

Since there's no harm done, I'm not really upset about it, but if we hadn't had the LOC, we would have had fees from overdrawing, plus possibly the returned check. I just never realized that the bank could cash them earlier than what it was written. Why even bother to have a date on it then? Just for the writer's records?

I didn't mean to mail it as early as it went out. Same thing happened as a PP; DH must have seen the envelope on the table and sent it off. It probably still would have gone through early, but maybe not before payday!

I usually do pay it online a day or so before it's due. If we set up automatic payments there's a fee, so I've never bothered. I'm not sure what made me write the check this time... Other than that I was thinking about it last week, and I wanted to make sure it didn't get forgotten. I guess next time I'll just put a reminder on my phone instead!

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#13 of 25 Old 11-04-2010, 07:35 PM
 
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Yeah sorry but the bank was right and you were in the "wrong". My boss writes our checks out for Friday but we get them on Thursday and the bank told me that i'm in the right to cash it as soon as i get it and that really my boss cannot write the check for a future date. Once it's written those funds need to be there and be accounted for.

In any case, sorry it happened to you because I hate when I make banking mistakes!!!

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#14 of 25 Old 11-04-2010, 08:48 PM
 
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That seems crazy though, doesn't it? Otherwise why even bother writing the date on it. I wonder if it's the same here in Canada, I know when we used to rent an apartment we'd give a whole bunch of post-dated cheques for future months. That would make no sense if the landlord could just cash them all at once...

Oh, and for automatic withdrawal they never take the payment out on the actual due date, it's always some time before it seems.
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#15 of 25 Old 11-04-2010, 08:53 PM
 
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Originally Posted by diana_of_the_dunes View Post
Sounds like I'm an idiot!
I don't think you're an idiot. I had no idea any of this was the case.

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#16 of 25 Old 11-04-2010, 11:23 PM
 
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Originally Posted by Ola_ View Post
That seems crazy though, doesn't it? Otherwise why even bother writing the date on it. I wonder if it's the same here in Canada, I know when we used to rent an apartment we'd give a whole bunch of post-dated cheques for future months. That would make no sense if the landlord could just cash them all at once...

Oh, and for automatic withdrawal they never take the payment out on the actual due date, it's always some time before it seems.
It is also the case in Canada, I learned the hard way .
Our automatic withdrawals always come out on or after (if the normal date falls on the weekend or holiday) the appropriate date.

And actually, landlords are not allowed to force you to write post-dated cheques. Many landlords and tenants agree to pay by post-dated cheque, but you can't strictly be forced to. This is according to the Residential Tenancies Act and Statutory Procedures Act via the Landlord and Tenant Board:

http://www.cmhc-schl.gc.ca/en/co/reh...h/fash_009.cfm

It says:
Post-dated Cheques

Post-dated cheques can be suggested, but a person cannot be refused a rental unit for refusing to give them. Landlords must provide tenants with a rent receipt.

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#17 of 25 Old 11-04-2010, 11:37 PM
 
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I'm pretty sure the date on the check is to be sure the check isn't too old, like written 6 months ago or something.

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#18 of 25 Old 11-04-2010, 11:40 PM
 
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Quote:
Originally Posted by Ola_ View Post
That seems crazy though, doesn't it? Otherwise why even bother writing the date on it. I wonder if it's the same here in Canada, I know when we used to rent an apartment we'd give a whole bunch of post-dated cheques for future months. That would make no sense if the landlord could just cash them all at once...

Oh, and for automatic withdrawal they never take the payment out on the actual due date, it's always some time before it seems.
Actually, there's nothing stopping your landlord from cashing them all, he has every legal right to. Unfortunately.
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#19 of 25 Old 11-05-2010, 12:02 AM
 
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Well, thanks for posting this! I just learned something new! Don't feel stupid, you probably just saved a bunch of us from making an even bigger mistake. In the past, I have written a group of post dated checks and I will certainly be cautious about that in the future.
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#20 of 25 Old 11-06-2010, 12:00 AM
 
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If you are going to write post dated cheques (which I generally don't recommend but sometimes it is unavoidable) I suggest using a highlighter to highlight the date and attaching a sticky note that asks that it not be cashed until the date it is written.

It might still go through early but at least it is flagged for the recipient.

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#21 of 25 Old 11-06-2010, 11:25 AM
 
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This is why I keep a portion of my savings in my checking account. It's NOT spendable money for anything less than the water heater bursting (which is what happened in September, yay fun) or other similar things for which savings are typically used. But the "cushion" keeps me from worrying about the timing on checks, and worrying about the timing on checks makes me physically ill. If I look at income/expenditure record at the end of the month and it's net-positive, then I don't fret about the couple of days where the account dipped into the "savings" portion.

OP, it sounds like your bare-minimum checking account is a budgeting strategy rather than a case of being flat broke with no savings. Maybe you should transfer a little money back into checking and see if that works for you. Remember to tell your husband that 1k (or whatever) is the "new zero." Mine didn't realize that for a few months, but he totally got it when I finally told him what I'd done.
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#22 of 25 Old 11-06-2010, 12:22 PM
 
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You're not an idiot! I think this is something that MANY people do not know.
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#23 of 25 Old 11-06-2010, 05:11 PM - Thread Starter
 
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Quote:
Originally Posted by Smithie

OP, it sounds like your bare-minimum checking account is a budgeting strategy rather than a case of being flat broke with no savings. Maybe you should transfer a little money back into checking and see if that works for you. Remember to tell your husband that 1k (or whatever) is the "new zero." Mine didn't realize that for a few months, but he totally got it when I finally told him what I'd done.
Yeah, keeping the checking account low is a budgeting thing. I'm not yet disciplined enough to not spend when there's extra in there, I don't think though. Whenever it looks liek there will be some "extra" money, I hurry up and transfer it into savings so it doesn't accidentally get spent. I can always transfer it back over in case we need it, but this way I don't figure it into our "spendable" money. Or maybe I should open a separate savings account for long-term vs short-term savings... Hmmm.

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#24 of 25 Old 11-07-2010, 12:08 AM
 
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I do my serious saving in an ING account, which is a royal pain to transfer from, and then there's the cushion savings in the checking account. You know yourself best, but at some point you'll be ready to try and trust yourself with a cushion. If it's not time yet, it's not time yet.
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#25 of 25 Old 11-07-2010, 06:15 PM
 
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Originally Posted by lyterae View Post
I was told the same thing when I worked as a teller.
I worked in the proof dept at a local bank and was told the same thing. If someone writes a check, it is their responsibility to have the money in the bank. Postdated or no.

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