Check 21 is a law that went into effect on October 28, 2004. It governs the hows and whys of using electronic check processing. If youre thinking about opening an ACH check processing account, its a good idea to learn about the Check 21 rules, especially in terms of how they apply to transferring funds and protecting your rights as a consumer.
Keep in mind that there is a difference between processing checks electronically and using EFT, or Electronic Funds Transfer. Whats the difference? First of all, there is a whole different suite of rules and regulations governing EFT transactions. While Check 21 touches upon some of these rules, its really a good idea to talk to your bank or financial adviser before making decisions about payment options.
How Check 21 Changes the Rules
Moreover, Check 21 is only part of a larger push on the part of banks and financial institutions to unify and coordinate electronic checking. Merchants and customers have taken advantage of electronic checking processes a lot in the recent years. So its more critical than ever for people to understand their rights vis-a-vis their checking accounts in order to ensure money safety.
For instance, one good rule of thumb is to review your checking statement on a fairly regular basis–every one or two months. Make sure that you havent been charged twice for any transaction and that you can account for all payments. One of the advantages to electronic checking is that banks can alert you to disparities in your record much quicker thanks to faster processing.
