What if the Bill Pay check gets lost in the mail?

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What if the Bill Pay check gets lost in the mail?

Postby natureexplorer » Wed Aug 17, 2011 10:08 am

I am wondering what would happen if the recipient claims a Bill Pay check never arrived. Or if the recipient claims the check arrived late.

Do you have any experience or insight with such a situation? Do different Bill Pay providers offer different guarantees delivery or even on-time delivery?

Do the record from the Bill Pay provider essentially constitute proof that the payment was mailed on time?
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Postby campy2010 » Wed Aug 17, 2011 10:18 am

You should ask your bank because there doesn't seem to be any overarching rules. The best way to know when it is mailed is to have the recipient show you the date the check was post-marked.

ETA: My credit union is very slow. They take the money out of your account, send it to a 3rd party processor in the mid-west (I live on one of the coasts), and then the 3rd party sends it along...eventually. The process seems to take about 10 days and the first time I used it the check was delivered about 5 days past their 'expected delivery date'. Bank of America is very fast. The day after the bill is scheduled the check is sent and the only thing holding it up is the USPS. So, I have seen both ends of the spectrum. Neither bank has guarantees because they are dependent on USPS bulk mail. You might be able to purchase a guarantee, but I have not looked into it. Wire transfer or ACH would probably be a better bet if you need on-time delivery.
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Postby dbltrbl » Wed Aug 17, 2011 10:26 am

I had something similar happen when my water bill was supposedly not paid so next month, I found out there were all types of extra charges. I sent that letter to my bank, last I ever heard of it. Bank took care of it.
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Postby WatchinU » Wed Aug 17, 2011 10:35 am

It doesn't happen a lot for me. It happened once and there was a late fee. The online banking group paid for that fee and offered it up--I didn't have to ask.

Banks are motivated to make online bill pay work seamlessly and without hassle as this is a more efficient and lower cost way for them to do business. They want to keep their customers happy.
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Postby Sam I Am » Wed Aug 17, 2011 10:38 am

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Postby natureexplorer » Wed Aug 17, 2011 10:45 am

campy2010 wrote:Wire transfer or ACH would probably be a better bet if you need on-time delivery.
I agree, but unfortunately the recipient wants a check.

At Schwab, one actually specifies a "Pay Date" (i.e. delivery-by date) rather than a "Sent On Date", and they reimburse up to $50 in late fees, which is not a lot when rent late penalties are concerned, let alone the consequences if non-receipt is claimed.
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Postby campy2010 » Wed Aug 17, 2011 11:13 am

natureexplorer wrote:
campy2010 wrote:Wire transfer or ACH would probably be a better bet if you need on-time delivery.
I agree, but unfortunately the recipient wants a check.

At Schwab, one actually specifies a "Pay Date" (i.e. delivery-by date) rather than a "Sent On Date", and they reimburse up to $50 in late fees, which is not a lot when rent late penalties are concerned, let alone the consequences if non-receipt is claimed.


Got it. It sounds like my credit union is similar to Schwab, and I discontinued using the service with them because I didn't like the "pay date" and the money clearing my account before the check was cashed. BOA has a much faster process and uses a "Sent on Date", which I find much more reassuring. So I automatically ACH credit union funds into my BOA account and use their much better bill pay service. Not ideal but it only takes 3 days or so. Worth the hassle for 3% interest at the credit union.
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Postby touchdowntodd » Wed Aug 17, 2011 12:43 pm

some services cover late fees .. but if you are late enough to recieve credit reporting very few businesses will be willing to correct it for you .. especially on large trades like mortgages ..

for this reason (and because i work ffor a mortgage company that will not correct when that happens), my mortgage is the only thing i let a company auto withdrawl besides investments... its their fault then, because the money is there
tryin to do this right... thanks guys
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Postby natureexplorer » Wed Aug 17, 2011 2:21 pm

Thanks everyone.

It sounds like Bill Pay systems are generally not a very solid solution for critical payments. It sounds like it is mostly a 'convenient' solution.

By the way, I actually prefer the Bill Pay method where the money is taken out of my account right away rather than only when it is cashed. That way I don't have to worry about the check being covered. I know they bank automatically redeposits the money into my account, so losing the money on a check that was never cashed is not an issue.
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Postby aja8888 » Wed Aug 17, 2011 3:51 pm

One nightmare with Bill Pay that got me to go back to paper checks:

Had bill pay for electric utility payment (electronic)

Got a call that my power was being turned off about a week after scheduling a bill payment for power co.

I said I paid, they said no payment received. I called bill pay co. They sent payment on time.

I called power co. - they said no record of payment exists.

I had to pay bill again as neither party could figure out where my payment was. This was after a dozen calls, faxes, letters, etc.

6 months later, I got a credit on my power bill for the "lost" payment (no explanation).

NO MORE BILL PAY FOR ME!!!
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Postby natureexplorer » Wed Aug 17, 2011 3:55 pm

aja8888 wrote:One nightmare with Bill Pay that got me to go back to paper checks:

Had bill pay for electric utility payment (electronic)

Got a call that my power was being turned off about a week after scheduling a bill payment for power co.

I said I paid, they said no payment received. I called bill pay co. They sent payment on time.

I called power co. - they said no record of payment exists.

I had to pay bill again as neither party could figure out where my payment was. This was after a dozen calls, faxes, letters, etc.

6 months later, I got a credit on my power bill for the "lost" payment (no explanation).

NO MORE BILL PAY FOR ME!!!
Exactly what I am worried about. What happened to any late fees?
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Re: What if the Bill Pay check gets lost in the mail?

Postby XtremeSki2001 » Wed Aug 17, 2011 3:57 pm

natureexplorer wrote:I am wondering what would happen if the recipient claims a Bill Pay check never arrived. Or if the recipient claims the check arrived late.

Do you have any experience or insight with such a situation? Do different Bill Pay providers offer different guarantees delivery or even on-time delivery?

Do the record from the Bill Pay provider essentially constitute proof that the payment was mailed on time?


Having worked in electronic banking a few years ago a few things usually happen:

Bill pay is sent electronically and not received - call the bank and they will have to research what happened. Often times it's sent to the wrong account or it's in limbo, but the bank will have to do the research.

Bill pay is sent via paper check - call the bank to determine if the check was deposited. If not, it's refunded to your account (via stop payment) and you need to do some research to find out what happened. If it was deposited, but not credited to your other account then you should get a copy of the deposited check. This copy should be faxed to the other company and ask them why your check was deposit but not credited to your account. Often times if it's the latter a conference call with the bank will make the process go smoother.

As for checks arriving late, typically the banks offer a scheduled delivery time - if it didn't get to the vendor in that window then you should talk to the bank. Where I worked usually worked with the customer, but it was often the recipient who has to be lenient and forgive the late payment. Sometimes a letter from the bank would help in this effort, but only in rare instances did my employer cover late fees incurred at the vendor.

Lastly, where I worked (and I still use their banking system for my payments) they tell me if it's going to be electronic or paper. For paper checks I usually schedule them to be paid two weeks early and I've never been late. Sure beats paying for envelopes, checks and stamps 8-)
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Re: What if the Bill Pay check gets lost in the mail?

Postby natureexplorer » Wed Aug 17, 2011 4:58 pm

XtremeSki2001 wrote:For paper checks I usually schedule them to be paid two weeks early...
Wow, two weeks sure would be early for a rent payment...
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Postby aja8888 » Wed Aug 17, 2011 5:30 pm

natureexplorer wrote:
aja8888 wrote:One nightmare with Bill Pay that got me to go back to paper checks:

Had bill pay for electric utility payment (electronic)

Got a call that my power was being turned off about a week after scheduling a bill payment for power co.

I said I paid, they said no payment received. I called bill pay co. They sent payment on time.

I called power co. - they said no record of payment exists.

I had to pay bill again as neither party could figure out where my payment was. This was after a dozen calls, faxes, letters, etc.

6 months later, I got a credit on my power bill for the "lost" payment (no explanation).

NO MORE BILL PAY FOR ME!!!
Exactly what I am worried about. What happened to any late fees?


No, because I repaid immediately they waived the late fee and I have been an on time customer for 15 years. But the possibility exists in the future.

What I don't like about these electronic payment is no one seems to want to help if one says they paid and the recipient says they did not receive payment. You end up in no mans land.....
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Postby nisiprius » Wed Aug 17, 2011 6:08 pm

I had an unpleasant experience a few years ago with a bank's bill pay payment to AT&T. No late fees were involved, merely nightly phone calls during dinnertime from a collection agency. For weeks. Despite my mailing them an image of the back of the cancelled check showing it had been cashed several days before the due date, and despite my having been a customer literally for decades with no late payments ever.
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Postby chipmonk » Wed Aug 17, 2011 6:23 pm

Sam I Am wrote:My old bill-pay subtracted the funds when the check was sent, my new bill-pay subtracts the funds when the check is cashed, more like a traditional check clearing event.
This is what Capital One does too... they just write a normal check with some some very high number like 99000 and mail it to the payee. This is nice for paying rent, since my landlord is busy and out of town a lot and I often collect a month or two of interest before he gets around to cashing my checks.

Sam I Am wrote:I love the convenience and accuracy of the bill-pay service. I write very few physical checks, now. My current supply of checks will most likely last me the rest of my life.
Yep, I agree. The only "real" checks I have used lately are voided checks for signing up for electronic bill payment with dumb, backward companies that won't just take my routing and account numbers :roll:
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Postby chipmonk » Wed Aug 17, 2011 6:25 pm

nisiprius wrote:I had an unpleasant experience a few years ago with a bank's bill pay payment to AT&T. No late fees were involved, merely nightly phone calls during dinnertime from a collection agency. For weeks. Despite my mailing them an image of the back of the cancelled check showing it had been cashed several days before the due date, and despite my having been a customer literally for decades with no late payments ever.
Huh... that does sound unpleasant! Is there any reason to think they would have processed a "normal" check (not from bill pay) any differently? I mean, a check's a check's a check, right?
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Postby aja8888 » Wed Aug 17, 2011 7:56 pm

Unpleasant is having to pay your $250 electric bill twice in the same month and having neither party, the bill payment service or the power company, do anything to help you figure out where your payment went.
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Postby chipmonk » Wed Aug 17, 2011 8:09 pm

aja8888 wrote:Unpleasant is having to pay your $250 electric bill twice in the same month and having neither party, the bill payment service or the power company, do anything to help you figure out where your payment went.
Certainly, but there are plenty of ways for banks (and consumers) to screw up that don't involve electronic bill pay, or banks auto-mailing checks. Your experience sounds extremely frustrating, but do you think there's any reason it's more likely to occur with an electronic payment than with a physical check?

Personally, I'd guess that I'm more likely to forget to mail a check on time, to lose a check in the mail, or simply to waste a lot of time, envelopes, and 44c stamps, than I am to suffer the consequences of a lost electronic bill payment.
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Postby aja8888 » Wed Aug 17, 2011 8:25 pm

chipmonk wrote:
aja8888 wrote:Unpleasant is having to pay your $250 electric bill twice in the same month and having neither party, the bill payment service or the power company, do anything to help you figure out where your payment went.
Certainly, but there are plenty of ways for banks (and consumers) to screw up that don't involve electronic bill pay, or banks auto-mailing checks. Your experience sounds extremely frustrating, but do you think there's any reason it's more likely to occur with an electronic payment than with a physical check?

Personally, I'd guess that I'm more likely to forget to mail a check on time, to lose a check in the mail, or simply to waste a lot of time, envelopes, and 44c stamps, than I am to suffer the consequences of a lost electronic bill payment.


At least with a paper check, if it gets cashed, I can get a scanned copy from my bank. All I got from the bill pay folks was a transaction number which the power company had no record of being associated with my account.
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Postby Lente » Wed Aug 17, 2011 8:58 pm

I had an incident with Schwab once (that schwab was very good about resolving) with the local water company here in san diego.

My biggest issue with the bill pay seems to be that the receiver has no motivation or interest to work with (the banks) bill pay service, especially if they have their own.

They were happy to tell me they were going to turn my water off unless I sent another bill. It took quite a bit of back and forth (on two separate accounts) and getting little to no help from the water company to resolve the issue.

I'd change water providers, but then, I cannot :(

As for late fees, I never had them as I always paid the bill a second time before it got to that point so I didn't have to worry about service/credit, but it was a PITA to get my original payment back.
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Re: What if the Bill Pay check gets lost in the mail?

Postby XtremeSki2001 » Wed Aug 17, 2011 10:55 pm

natureexplorer wrote:
XtremeSki2001 wrote:For paper checks I usually schedule them to be paid two weeks early...
Wow, two weeks sure would be early for a rent payment...


It has to be paid that month anyway - no reason to wait a week or two if I can get it off my "to-pay" list and to the recipient on time. Even though I pay it two weeks early, they usually don't get it until 2 days ahead of time.
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Postby scrabbler1 » Thu Aug 18, 2011 9:22 am

After the PO delivered my monthly co-op maintenance payment (paper check) late back in late January, I finally switched to bill-pay through my bank for my July payment. I did this at the suggestion of folks at my co-op's managing agent office, people I am on very good terms with. The bank mails a paper check, one I do not see when it is cashed (unfortunately), because the managing agent does not accept other means as a method of payment.

Two payments done, no problems, so far. If the MA wants the check a few days sooner that is not a problem. They are not strict on late fees if the resident has a good history of on-time payments.

With this being the only monthly payment I (or my bank) have to mail a check to, I now have some months with no canceled check images appearing in my monthly statement. :D
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Postby Sam I Am » Thu Aug 18, 2011 9:38 am

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Postby dratkinson » Thu Aug 18, 2011 6:52 pm

You might want to investigate the Automatic Bill Payment plans of your creditors. With ABP, you allow your creditor to withdraw their monthly fee directly from your account. With ABP, your responsibility is to keep enough money in your account to pay the ABP (and avoid bank low-balance fees).

(1) With ABP, the responsibility for paying your monthly bill becomes your creditors' and the payment is recorded on your bank statement as an ACH transfer to them---so it's really hard for creditor to deny it didn't happen. (2) And if it doesn't happen, its really hard to blame you when under ABP its their responsibility to withdraw their payment. (I see this as a win/win for me.)

My experience with ABP.
    I still receive a monthly paper statement through USPS.

    The statement contains a reminder saying bill will be paid through ABP and payment amount will be withdrawn on due date. Due date is ~2 weeks in the future, just like I'm use to when sending out paper checks. So I have time to call, dispute a charge, or cancel ABP before the payment is withdrawn. (I've done this with my phone bill. Correction was make on next bill.)

    I record the payment in my checkbook and in my money management program for the due date. (Elapsed time from bill receipt to recording entries is ~5-10 minutes.)

    When my monthly bank statement comes in, I reconcile it against my checkbook and money management program. (This means I've also reconciled all of the monthly ABP payments.)

I use ABP for all of my monthly bills (utilities, phone, insurance, credit cards, ...).

The only discrepancies I've noticed have been:

    Sometimes a creditor will withdraw their payment later than the due date. (I could never get away with that with a paper check.)

    The PenFed CC statement does not include the reminder notice that payment will be made through ABP---you just must remember that it is being paid that way. Calls to PenFed CC will confirm ABP is set up.

    USAA insurance requires all insurance policies (home, car,...) to be paid the same way (annually, semi-annually, monthly) to use ABP. This actually has been a benefit as I was making annual (home), and semiannual (car) payments. With monthly payments, things are now more uniform and I get to keep my money longer. USAA does not charge a fee for monthly ABP, as I remember them doing with monthly checks---the reason I was making annual/semi-annual payments. USAA also accepts ABP through a cash-back CC. Sweet!


Other than those few minor discrepancies, I know of no serious reason against using ABP.



One note of caution. I would never set up ABP with any creditor I did not completely trust. Example: NetZero, in my case---way too many mess-ups with billing and service-provided for me to completely trust them. So I send them only an annual check---to limit my exposure to their potential mistakes.
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Postby aja8888 » Thu Aug 18, 2011 10:52 pm

dratkinson wrote:Other than those few minor discrepancies, I know of no serious reason against using ABP.
.


I'm not so sure I want to have third parties have access to a bank account of mine.

My daughter was doing this for car insurance on a monthly basis and when she got married and changed insurance companies, he carrier continued to suck payments out of her account until she screamed. It took a bit of time and effort to get the unauthorized payments reversed. I know this is one incidence, and probably not a common occurrence.
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Postby scrabbler1 » Fri Aug 19, 2011 12:54 am

The only places I had or have ABP are for monthly bills to entities I am unlikley to ever change or to places who have no real incentive to take more money than an agreed-upon amount. Also, I always pay the full amount so there is never any doubt about how much I will pay any given month.

For example, I use ABP to pay my three monthly utilities - cable TV, phone (includes internet), and electric. I have had ABP with each of them for at least 11 years. When I had a mortgage, I had ABP set up with them. I still received a payment book in case I chose to pay additional principal which I did a few times via paper check. I even used ABP to handle the final payoff of the loan.

I do not use ABP to pay any bill which is not monthly. Those include quarterly, semi-annual, and annual bills as well as irregular bills such as credit card which I pay in person at a bank which is walking distance from where I live. Some of these less frequent bills (i.e. taxes, insurance, mainly) have been for higher amounts which I did not always have in my regular checking account so I used another account to pay them. The CC bill I paid in person so I would never have to worry about the bank "misplacing" my payment and hitting me with a late fee.
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Postby jsl11 » Fri Aug 19, 2011 2:47 am

Some utilities, such as telephone, cell phone, and cable will auto-bill your credit card. This is better than ABP because you get the credit card rebate, the utility does not have access to your checking account, and you get the protection that comes with credit cards in case of any disputes. You will also get a little extra float on the money. I use this method whenever it is available without any extra fees.

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Re: What if the Bill Pay check gets lost in the mail?

Postby soaring » Fri Aug 19, 2011 7:38 am

natureexplorer wrote:I am wondering what would happen if the recipient claims a Bill Pay check never arrived. Or if the recipient claims the check arrived late.

Do you have any experience or insight with such a situation? Do different Bill Pay providers offer different guarantees delivery or even on-time delivery?

Do the record from the Bill Pay provider essentially constitute proof that the payment was mailed on time?


This possible issue is exactly why I have all companies I do business with (electric, cable, internet, Credit Cards, etc) pull their monthly bill total from my checking. That way if I keep an adequate balance and they don't get paid it is their issue not mine.

I don't push the payment to them they pull it. I've been doing this for about 10 years without issue.
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Postby aja8888 » Fri Aug 19, 2011 10:32 am

In the last year or so, rather than pay some bills with a paper check, I have been using my AMEX Blue Cash card to pay bills such as cell phone providers, Comcast Cable, etc initiating a payment from their websites. I get the convenience of all in one location for those payments, the protection of the credit card and 1 - 2% cash back at the end of the year.

More and more service providers will send you electronic bills and they also have web sites that will allow you to make a payment with a credit card. AMEX has some nice features such as allowing you to categorize payees with your own categories, year end summaries of your spending, etc.
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Re: What if the Bill Pay check gets lost in the mail?

Postby diyernh » Thu Feb 21, 2013 10:41 pm

Has anyone looked into the number of Web Bill Payment Services that "lost" the mailed checks?

I just found out that my tax bill (thousands of $) was "lost in the mail" from the bill payment service. They took the money out of my account months ago. I paid the penalties and requested the funds to be redeposited.

It is strange that the 10 people in line in front of me at the tax office also had the web pay checks lost. None of the manual,personal checks were lost. There are several banks involved.

If they are a Free service for me, they must get paid by someone. Possibly they use check float and never mail the checks? Or just scuff them up and mail them late like they were stuck somewhere? It seems like large mailed checks would be the best to have this happen.

What happens if a Web Bill Pay Service goes bankrupt after floating your large check? They have money, and don't need to pay your bill?
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Re: What if the Bill Pay check gets lost in the mail?

Postby Sam I Am » Fri Feb 22, 2013 11:03 am

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Re: What if the Bill Pay check gets lost in the mail?

Postby aja8888 » Fri Feb 22, 2013 11:14 am

Sam I Am wrote:
diyernh wrote:Has anyone looked into the number of Web Bill Payment Services that "lost" the mailed checks?

I just found out that my tax bill (thousands of $) was "lost in the mail" from the bill payment service. They took the money out of my account months ago. I paid the penalties and requested the funds to be redeposited.

It is strange that the 10 people in line in front of me at the tax office also had the web pay checks lost. None of the manual,personal checks were lost. There are several banks involved.

If they are a Free service for me, they must get paid by someone. Possibly they use check float and never mail the checks? Or just scuff them up and mail them late like they were stuck somewhere? It seems like large mailed checks would be the best to have this happen.

What happens if a Web Bill Pay Service goes bankrupt after floating your large check? They have money, and don't need to pay your bill?


Though I am and have been a fan of bill-pay, I don't think I would ever use a bill-pay service that was not associated with my local bank/credit union. As well, I don't think I'm ready to have a service receive my bills, and pay them, yet. Although my new bill-pay service offered by my credit union does facilitate receiving bills electronically. I already have that set up on any account that allows it, outside of bill-pay.

As it is, I can call or even visit the president of my credit union if something gets wrapped around the axle of my bill-pay service, after all, it was set up by my credit union.

I'll be honest, in the beginning I never thought the bill-pay service would be so solid, but I have been pleasantly surprised over the years.

Sam I Am


Sam: I had a bill pay payment go into never-never land to my electricity provider. It was sent through my credit union (35 year member I am). When I inquired about the lost payment, they (my credit union) referred me to the third party service that actually handles the processing. Never the less, the bank/credit unions are not the ones sending the payments out. It took me 3 months to get the issue straightened out as no one wanted to admit fault. That included the credit union, the processing center or the power provider. I had to pay the bill again to straighten it out. Months later, a credit showed up on my power bill. Apparently, the payment went "somewhere" and got re-accounted for.
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Re: What if the Bill Pay check gets lost in the mail?

Postby diyernh » Sat Feb 23, 2013 1:17 am

Yes, my issue was with a credit union. I have been a member for over 32 years. I have my mortgages, investments, 401K, everythig there.

I called my local CU branch about this. They said it was a third party vendor that does the web bill payment. They offered the 1800 number that I called. This service pulls the money from my account and floats it until the check clears. Reading through the internet, and my towns experience, it seems like somehow many large checks get lost in the mail for months or forever. I realize that any service that is free is probably not looking out for my best interests. I feel like a facebook user that just realized that facebook was not for me, but for advertizing word of mouth.

My credit union knows that I'm ticked. It was their 3rd party web pay that lost the check. As the funds were pulled from my account, I had no clue the check wasn't cashed. But their 3rd party mortage service hired a third party tax verification service that found out the check wasn't cashed. They sent me a letter that in 30 days, I must pay the taxes (received the letter 25 days into it) or they will pay the taxes and impound my accounts to pay for it. So, they took my money and floated it, I had to borrow money to pay the taxes,only to have them pay the taxes again and impound my money?

Sorry for the ranting. This is the second time that I've had property tax issues. The first time my mortgage companies closing lawyer was embezzling money from closings. I was agressive and got my money before he ran out. Others weren't so lucky.

The Web Bill Pay service did just refund the floated money. Don't have to worry about them disappearing now.

I may be writing more paper checks and hand delivering them. Or at least keeping the web bill pay and biller on speed dial until the check is cashed.
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Re: What if the Bill Pay check gets lost in the mail?

Postby Mudpuppy » Sat Feb 23, 2013 1:50 am

diyernh wrote:Sorry for the ranting. This is the second time that I've had property tax issues. The first time my mortgage companies closing lawyer was embezzling money from closings. I was agressive and got my money before he ran out. Others weren't so lucky.

The Web Bill Pay service did just refund the floated money. Don't have to worry about them disappearing now.

I may be writing more paper checks and hand delivering them. Or at least keeping the web bill pay and biller on speed dial until the check is cashed.

For property taxes, you likely have another option. Find out if your property tax authority has a website that allows you to a) query the current state of the property tax bill (e.g. find out if it's been paid) and b) pay the property tax bill online by credit card (and then you can pay off the credit card by bill pay, ACH, check, etc). That's how I verify that my mortgage company escrow service has paid my property tax bill on time and my parents use the tax authority's website to pay their property tax bills. It cuts out the middle-man and makes sure everything is happening as needed.
Mudpuppy
 
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