Credit union debits wrong amount...blames other bank

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investor4life
Posts: 299
Joined: Fri Oct 08, 2010 9:45 am

Credit union debits wrong amount...blames other bank

Post by investor4life »

Recently, I'd written a check to a friend for a certain amount. Today I saw that my CU had debited my account for an incorrect amount against that check. The discrepancy is not large (under $10) and is the first time it's happened to me in >30 years of banking with this CU. The mistake has been acknowledged and the CU will make me whole.

I am willing to accept that mistakes happen occasionally. What bothers me though is that when I asked the rep if they had safeguards in place to catch these errors retroactively (assuming they doublecheck all transactions), the answer I got was that it was the other bank's fault for submitting an incorrect amount and that I (as the customer) am responsible for monitoring and catching these things, not the CU. When I pushed back and asked what if the discrepancy had been in the thousands, the response was that this would have caught my attention anyway! I am floored...

Is this true in general with financial institutions (banks, brokerages, etc.)? I've been quite happy with this CU but this sort of policy/attitude may cause me to look elsewhere.
slidecreek
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Re: Credit union debits wrong amount...blames other bank

Post by slidecreek »

I am not a banker, but believe this has been standard practice for ~20 years.

Your bank/cu doesn't directly process the check. The depositing bank reads the account/routing number from your check and does an electronic transfer. This change allowed for things like depositing checks on our phones.
prd1982
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Re: Credit union debits wrong amount...blames other bank

Post by prd1982 »

investor4life wrote: Fri Jun 18, 2021 9:31 am
What bothers me though is that when I asked the rep if they had safeguards in place to catch these errors retroactively (assuming they doublecheck all transactions), …
I would not expect them to double check. I assume all of this is automated once the cashing bank enters the amount. And I would agree it was the cashing bank’s error.

Had the amount been large, I would assume the check might bounce. And yes, it is your responsibility to check your statements. Note that one of the banks will make you whole. Had the amt been large, I expect your CU would have you contact the cashing bank. I thik the CU did right by you.
Topic Author
investor4life
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Joined: Fri Oct 08, 2010 9:45 am

Re: Credit union debits wrong amount...blames other bank

Post by investor4life »

I am with you on the process by which the banks communicate and transact electronically. But doesn't the other bank (the one issuing the funds, i.e., my CU) have the responsibility to check that the amount being requested is correct?
Broken Man 1999
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Re: Credit union debits wrong amount...blames other bank

Post by Broken Man 1999 »

I wonder if anyone even sees the check once the bank who cashed entered it into the system.


Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
earflop
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Re: Credit union debits wrong amount...blames other bank

Post by earflop »

prd1982 wrote: Fri Jun 18, 2021 9:39 am
investor4life wrote: Fri Jun 18, 2021 9:31 am
What bothers me though is that when I asked the rep if they had safeguards in place to catch these errors retroactively (assuming they doublecheck all transactions), …
I would not expect them to double check. I assume all of this is automated once the cashing bank enters the amount. And I would agree it was the cashing bank’s error.
I run into this kind of thing all the time at my place of business. We receive a very high volume of payments on behalf of our clients. Sometimes the checks are hard to read and our clients make data entry errors for the wrong dollar amount. Whatever they enter in the computer is what gets pulled from the customer's account. Sometimes the customer then comes back to us and complains that the wrong amount was taken out, which is fixable. Sometimes the problem is not noticed until years later during an audit - when it is harder to fix.
Big Dog
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Re: Credit union debits wrong amount...blames other bank

Post by Big Dog »

slidecreek wrote: Fri Jun 18, 2021 9:37 am I am not a banker, but believe this has been standard practice for ~20 years.
And probably longer than that.

OP: It's the way the banking system works; don't drop your CU on account of this.
Seasonal
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Re: Credit union debits wrong amount...blames other bank

Post by Seasonal »

Banks and many businesses scan checks they receive, then submit the information to the check writer's bank. It's usually all automatic unless someone (usually you, the check writer) notices a problem. Having a human confirm that it was scanned accurately increases costs and would slow the process. Often, you won't even get the original cancelled check back (the receiving business converts the check into an ACH file and that is transmitted to the bank). As noted, this has been going on for a long time. For example, see https://en.wikipedia.org/wiki/Check_21_Act
criticalmass
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Re: Credit union debits wrong amount...blames other bank

Post by criticalmass »

investor4life wrote: Fri Jun 18, 2021 9:31 am Recently, I'd written a check to a friend for a certain amount. Today I saw that my CU had debited my account for an incorrect amount against that check. The discrepancy is not large (under $10) and is the first time it's happened to me in >30 years of banking with this CU. The mistake has been acknowledged and the CU will make me whole.

I am willing to accept that mistakes happen occasionally. What bothers me though is that when I asked the rep if they had safeguards in place to catch these errors retroactively (assuming they doublecheck all transactions), the answer I got was that it was the other bank's fault for submitting an incorrect amount and that I (as the customer) am responsible for monitoring and catching these things, not the CU. When I pushed back and asked what if the discrepancy had been in the thousands, the response was that this would have caught my attention anyway! I am floored...

Is this true in general with financial institutions (banks, brokerages, etc.)? I've been quite happy with this CU but this sort of policy/attitude may cause me to look elsewhere.
What do you mean by "double check all transactions?" Are you expecting a bank or credit union issuing checks to hire someone to examine each check or image that is already entered and submitted by the check depositing (cashing) institution?

I don't know of any bank or credit union that does this for small transactions. Larger transactions, perhaps $10,000 or higher receive extra scrutiny, sometimes. Check your account disclosures, Truth in Savings description, and regulations CC/E. Then check your statements closely. Don't have extra bank accounts that require additional cross checks each month beyond what you need if you can help it.
talzara
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Re: Credit union debits wrong amount...blames other bank

Post by talzara »

investor4life wrote: Fri Jun 18, 2021 9:41 am I am with you on the process by which the banks communicate and transact electronically. But doesn't the other bank (the one issuing the funds, i.e., my CU) have the responsibility to check that the amount being requested is correct?
The banking system in the United States runs on trust. It's very outdated, and it's very far behind what is technically possible.

Many banks offer positive pay for business checking accounts. The business tells the bank the amount of every check that has been written. The bank will match the presented checks against the list of written checks, and it will only pay exact matches. If an $890 check gets presented as an $899 check because someone hit the wrong key on the keyboard, the bank will reject the check.

Banks often charge a fee for positive pay on business accounts. Personal checking accounts do not have access to positive pay.

In my opinion, positive pay should be available for free on all accounts. It's like remote deposit of checks, a feature that was available on business accounts years before it was made available to personal accounts. In fact, remote deposit is riskier than positive pay. Remote deposit allows you to control the amount that is withdrawn from another account, but positive pay only gives you control over your own account.
InMyDreams
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Re: Credit union debits wrong amount...blames other bank

Post by InMyDreams »

How about not writing checks? Everything needed to ETF from your account is usually on your check. I talked to a CU employee - she locks away all the paper checks she has and avoids using them as much as possible. Typically, I only use checks to pay taxes.

In fact, a friend wrote a check for a small amount, the recipient scanned the check for deposit - and threw the check into the trash. Apparently someone else found the check and managed to make several other small payments with the info on the account.

My CU BillPay allows me to enter a payor/address/account#/memo - and snail-mail a check to the payor. My info does not appear on the check unless I want it to.
Broken Man 1999
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Re: Credit union debits wrong amount...blames other bank

Post by Broken Man 1999 »

I write very few checks, mostly to trades people. Even if they accept a credit card, I don't want them to pay a swipe fee.

So far as bill pay, I'm down to one; I pay my lawn guy automatically once a month.

Larger businesses, credit card payment if no fees added.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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gobel
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Re: Credit union debits wrong amount...blames other bank

Post by gobel »

investor4life wrote: Fri Jun 18, 2021 9:31 am and that I (as the customer) am responsible for monitoring and catching these things, not the CU. When I pushed back and asked what if the discrepancy had been in the thousands, the response was that this would have caught my attention anyway! I am floored...

Is this true in general with financial institutions (banks, brokerages, etc.)? I've been quite happy with this CU but this sort of policy/attitude may cause me to look elsewhere.
Look at the back of any bank statement. It always says you have 30 or 60 days from the date of the statement to notify them in writing of any mistakes you find. It's always been that way.
TropikThunder
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Re: Credit union debits wrong amount...blames other bank

Post by TropikThunder »

investor4life wrote: Fri Jun 18, 2021 9:41 am But doesn't the other bank (the one issuing the funds, i.e., my CU) have the responsibility to check that the amount being requested is correct?
Your bank/CU will only know how much you made the check out for when they receive the endorsed, physical copy from the depositing bank. That's usually after the money has been sent since everyone converts paper checks to EFT to process them faster. No bank is going to pay someone to look at handwritten checks to make sure the amount written on the check matches the amount withdrawn from the account.
hachiko
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Re: Credit union debits wrong amount...blames other bank

Post by hachiko »

investor4life wrote: Fri Jun 18, 2021 9:31 am When I pushed back and asked what if the discrepancy had been in the thousands, the response was that this would have caught my attention anyway!
Sounds to me like the banker won that back and forth.

It's like the guy who tries to get an airline ticket on a sold out flight and says "what if the president was here, would you sell him a ticket?" And the ticket agent responds "sir, the president flies on air force one."
Topic Author
investor4life
Posts: 299
Joined: Fri Oct 08, 2010 9:45 am

Re: Credit union debits wrong amount...blames other bank

Post by investor4life »

Thank you all for your responses. As always, I come away having learned something new from this board :)
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