The Check 21 Act is landmark legislation that will take effect October 28, 2004. It will permit any person or entity who processes a check to create what the Act dubs a “substitute check” – a paper reproduction (front and back) of the original check.

What will I get back with my statement?

FCB Banks already provides electronic images of your checks in your monthly statement. You will continue to enjoy this service without interruption.

Why create a substitute check?

There are many good reasons for the creation of substitute checks. Currently, the check processing system relies on physically transporting paper checks from one location to the next; and, in the event of bad weather, the system can get bogged down. In addition to the time constraints, it costs millions of dollars every year to transport and process paper checks. As a result of authorizing substitute checks, the Check 21 Act will foster the electronic processing of checks because the substitute check process begins by creating an electronic image of the paper check. By its very nature, the electronic check image can be conveyed and processed electronically – decreasing processing time and transportation costs while reducing the likelihood of items being lost or destroyed in transit. If a physical check is ever needed, the electronic image can be used to create a paper reproduction (or substitute check) at any point in the process.

How does the Check 21 Act affect the possibility of someone stealing my identity or using my account to write fraudulent checks?

Relying on check images – instead of paper checks – should make it less likely that an identity thief will come into possession of the personal financial information located on your check. The original check is physically taken out of the processing stream, and the security of electronic channels limits human contact with your financial information.

How does the Check 21 Act affect float time?

Accelerated check processing will likely mean a reduction in the so-called “float” time – the amount of time between the writing and the cashing of a check.

What if the original check and its substitute get processed?

In order to process a substitute check a financial institution must warrant that the original check will not be processed. The check’s drafter will be able to submit a claim in the unlikely event that the original check and the substitute are both processed.

What if the substitute check is not an accurate image of the check I wrote and I need the original to prove my claim?

The Check 21 Act provides consumers with specific recrediting rights. If you believe the substitute check does not accurately reflect the transaction, contact us immediately (you may be asked to submit your claim in writing). After receiving your claim, we will investigate the matter and get back to you – and, if warranted, recredit your account.

What if there is a dispute and the retailer or service provider won’t accept the substitute check as proof of payment?

The substitute check is the legal equivalent of the original. Courts, retailers, and service providers are all required to accept the substitute as proof of payment in the same manner as they would accept the original.

What’s the difference between an electronic check conversion (e-check) and a substitute check?

An e-check is an electronic funds transfer initiated by a check. With an e-check, the transaction is actually routed through the Automated Clearing House (ACH) network. Typically, the retailer takes your check, scans it for the encoded financial information, and gets your authorization prior to initiating the transfer. Once you authorize payment, the original check is stamped “void” and returned to you. The transaction will generally appear on your account statement with other electronic or ACH-type transactions. A substitute check, on the other hand, is a replacement that is the legal equivalent of the original check. It is created from an image of the original, processed as a check, and will appear on your account statement as a check.