Do numbers or words count on a check?
I have a question on the check-clearing process. I recently
wrote a check to my mortgage bank for the usual payment amount of $1,573.13. But,
in the written line I mistakenly wrote "one thousand seventy three and 13/100s."
The mortgage amount is always the same and I always pay the
same amount on time. Needless to say, the mortgage bank processed the check for
the smaller amount, the mortgage was not credited, the funds went into a suspense
account (since they do not accept partial payments) and I also incurred a late
charge. Luckily, I caught this and mailed in the remainder of the payment before
the next payment was due. I am now struggling to have the late charges reversed.
question is two parts: first, which bank encodes the check for the processing
amount (the payee or payer) and second, if the written amount differs from the
numerical amount of the check, which is correct or legal?Sincerely,
When the check courtesy amount (box) and the check legal amount
(line) don't match on a check, it's easy to guess which one is used for check
clearing. It's the legal line where you write out the amount.
payee bank encodes the check for processing because it receives the check and
has to input the relevant variables into the check-clearing system like the amount,
the accounts and the routing number. Your account information, except for
the amount of the check, is encoded in the MICR (Magnetic Ink Character Recognition)
line printed on the bottom of your check. The payee's deposit slip provides his
Check 21, which became effective
in October 2004, allows the payee bank to process checks electronically so as
to not require the return of a physical check back to the payer bank. A substitute
check, essentially an image of the original check, is supplied to the payer bank.
A Bankrate feature, "Check
21: New law ends checking traditions," has more about Check 21 as does
Reserve Board publication.
If I were your lender, I wouldn't
reverse the late charges. Partial payments aren't accepted, and you didn't make
payment in full. How is this the lender's fault? Past payment history shows
you to be diligent in paying your mortgage and it's no doubt an honest mistake,
but it's still a mistake. Why would you think that you don't owe the late fee? If
you asked and the lender said no, I'd leave it at that and end this struggle.
you considered online bill pay or direct debit as a way to automate your mortgage
payments? You'll save the price of a stamp, and late payments should never
be an issue again. A Bankrate feature, "Online
banking," has more information about online banking.
ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "Financing a
home," "Saving & investing" or "money."